RBI found flaws in corporate governance of some banks

RBI found flaws in corporate governance of some banks: Governor said – this is a matter of concern, it threatens volatility in the banking sector

May 29, 2023 - 16:49
RBI found flaws in corporate governance of some banks

RBI ie Reserve Bank of India Governor Shaktikanta Das said on Monday (May 29) that some banks have tried to hide the actual position of their stressed assets. Along with this, a governance gap has also been observed in some lenders.
Despite the guidelines of the Reserve Bank, it is a matter of concern that even after the guidelines of the RBI, flaws have been found in the corporate governance of some banks. These lapses in corporate governance can lead to volatility in the banking sector. Along with this, he warned the banks and asked them to be careful. However, he did not name any bank during this period.
Governor Shaktikanta Das said, 'We have to keep in mind that when things are going well, the risks are often ignored. Therefore, the Board of Directors of the banks and their senior management should maintain a vigil on external risks and internal deficiencies.
Shaktikanta Das said, 'Indian banking sector stands strong and stable. Today our banking sector is strong and stable with a 16.1% Capital-to-Risk Weighted Assets Ratio (CRAR), 4.41% Non-Performing Assets (NPA), 1.16% Net NPA and 73.20% Provision Coverage Ratio.'
The RBI governor said all these things while addressing the conference of directors of private and government banks. During this, he said that a strong governance structure is the first and foremost thing for sustainable financial performance along with the stability of banks.
Along with this, Shaktikanta Das emphasized the need to discuss 7 important topics. These topics are asked to be discussed during the board meeting, which includes business strategy, financial reports and their accuracy, risk, compliance, customer protection, financial inclusion, and human resources.

Muskan Kumawat Journalist & Writer