Page 34 - Banking Finance October 2020
P. 34

ARTICLE







         MESSY PLAY





         OR CLEAN UP





         ACT?

















         D         ue to many high profile flare-ups entailing  discussion paper was July 15. The RBI has mentioned that


                   dominance or control concerns in banks and
                                                              fresh guidelines will be released based on the feedback of
                   financial institutions, corporate governance in
                                                              stakeholders. The new norms applicable to private, foreign
                   the banking sector has encapsulated a great
                   deal of attentiveness lately in India. Considering  and public sector banks will come into effect within six
                                                              months after being sited on the website of Reserve Bank of
         the inadequacy and ineptitude of the norms prescribed by  India or from 1st day of April 2021, whichever is later.
         the Securities and Exchange Board of India to handle
         governance in banks and financial establishments, the  What's on paper?
         Reserve Bank of India has published a Discussion Paper on  The discussion paper sees the light of day in the background
         Governance in Commercial Banks in India.According to the  of two latest cases of governance failures at ICICI and YES
         RBI the objective of the discussion paper is to bring into line  banks. The former CEO of ICICI bank had to step down in
         the current governing scaffold with international best
                                                              the midst of accusations of conflict of interest and for
         practices while being watchful of the framework of the  violation of code of conduct. The founder of YES bank has
         domestic financial system.
                                                              been charge-sheeted by Enforcement Directorate for
                                                              granting high value loans in slipshod fashion.
         The due date for evocations and comments on the

                                                              Therefore, the paper positions advanced accountabilities for
                             About the author                 the Board of Directors to make sure that the banks preserve
                                                              uppermost benchmarks of governance and circumvent
                      Shivanand Pandit                        conflict of interest.The RBI has cited that the Board should
                      Autonomous Finance and Tax Adviser      outline a penned conflict of interest policy to confirm that
                      Margao, Goa                             directors are aware what actions or events could lead to


            34 | 2020 | OCTOBER                                                            | BANKING FINANCE
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