Electric Power Assist Steering (EPAS) is a safety critical system because it affects vehicle stability and dynamics. In EPAS, electric motor takes the power from the battery and delivers this power to rack and pinion only on demand. Since EPAS contains electrical component such as Motor and electronic component such as Electronic Control Unit (ECU), reliability of these components is very important. To ensure safety and reliability, ISO 26262 standards are adapted which are derived from IEC 61508. This standard regulates the product development on system, hardware and software level and manages functional safety for electrical and electronic components.This paper discusses the applicability of the ISO 26262 standard to the development of EPAS ECU with respect to its hardware and software design. Hazard analysis and risk assessment of the basic EPAS architecture is performed and architecture is improved to achieve safety goal as per the standard. Reliability analysis of the new architecture is done using fault tree analysis (FTA) and failure mode and effect analysis (FMEA). This reliability analysis helped us in identifying new functional and non-functional hazards in the system on which we can take preventive measures and achieve our safety goal.