Home > Business Law, Business Ethics > Vol 2 No 1 June 2014 Abstract 5
Corporate Governance Issues in Banks in India Dr. R. Seenivasan

Abstract
The literature on corporate governance covers a range of issues such as protection of shareholders’ rights, enhancing shareholders’ value, Board issues including practices, the control systems, in particular internal control systems. Banks have some unique features that make their corporate governance different from, and more complicated than, that of other firms. For e.g., their balance sheets are not very transparent, they are highly leveraged, they typically have short-term liabilities and longer-term assets, they are heavily regulated and have access to government safety nets, and they are systemically very critical organizations. This paper seeks to identify the major issues in corporate governance in banks in India and to provide suggestions for possible action by the Reserve Bank of India as banking regulator. These issues relate to the composition of the Board of Directors and the duties of members, the functions of the board, the committees of the board, preventing abusive related party transactions and disclosures. The paper makes me suggestions as to the role of the Reserve Bank of India in strengthening corporate governance in Indian banks in the public as well as the private sector.

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