CORPORATE GOVERNANCE :

Corporate Governance is an integral part of the management control system which reflects the corporate’s strategy in maintaining the image and reputation of the company. In today’s global competition, banks have to be careful in ensuring their integrity in dealing with the financial aspects of their clients. In this respect, dynamic corporate governance practices are needed.

Corporate Governance means to ensure that the transparency, accountability in the interests of the stakeholders such as the shareholders, employees, clients and others. Over the years eve since the Cadbury Committee in 1992 came out with set of guidelines on the topic of Corporate Governance, many more committees have highlighted the need for a changing corporate governance practices with the changing time and business environment.

Effective Corporate Governance Practices

The objectives are:-

(i) To promote transparent and efficient markets which are consistent with the rule of Law.

(ii) To protect and facilitate the exercise of shareholders’ rights.

(iii) Timely and accurate disclosures to be made on all important issues relating to the corporation covering the financial situation, performance ,ownership and governance of the company.

Over the years, the Reserve Bank of India as Supervisor of Banking companies in India has been playing significant role in ensuring the sound corporate governance practices which are followed by the banking companies. RBI’s various guidelines in mergers and acquisitions, pattern of shareholding, restrictions on various issues, are some of the examples of RBI’s role in the corporate governance practices of banks in India.