Banks must swear by RBI’s norms on governance
×
Radical reforms are also needed from the govt for a material improvement in the governance of PSBs
The Reserve Bank of India (RBI) issued operative guidelines with regard to the appointments of MD and CEO, Whole Time Director, Chairperson, Non-Executive Directors and composition of important committees last month, as part of its measures to strengthen corporate governance standards in commercial banks.
Further, the regulator plans to bring out a ‘Master Direction on Governance’ in commercial banks, based on the ‘Discussion Paper on Governance in Commercial Banks in India’.
The discussion paper, as well as the recent instructions on appointments of directors and constitution of important committees, gives much importance to the roles of independent and NEDs in developing an efficient and effective ‘corporate governance model’ in banks.