Volume : III, Issue : XII, December - 2013

Issues of Corporate Governance : Banking Sector

Dr. Bipin T. Vadhar

Abstract :

Corporate ethics has been much in the news in recent years, and the margin for an executive slip–up these days is narrow. Anything from a private company each like Satyam; International Sports Event like Common Wealth Games or allocation of 2G licenses to private players have raised an alarm for Indians to be the watch–dog. The Cadbury Report generated a lot of interest in India. The issue of corporate governance was studied in depth and dealt with by the Confederation of Indian Industries (CII), Associated Chamber of Commerce and Industry (ASSOCHAM) and Securities and Exchange Board of India (SEBI). Co–operative banks as corporate entities possess certain unique characteristics. Ethical issues in the financial services industry affect everyone, because even if you don’t work in the field, you’re a consumer of the services. Prudential norms in terms of income recognition, asset classification, and capital adequacy have been well assimilated by the Indian banking system. Beginning 2005, banks will be required to set aside capital charge for market risk on their trading portfolio of government investments, which was earlier virtually exempt from market risk requirement. ALM and Risk Management Practices – At the initiative of the regulators, banks were quickly required to address the need for Asset Liability Management followed by risk management practices. The real success of our financial sector reforms will however depend primarily on the organisational effectiveness of the banks, including cooperative banks, for which initiatives will have to come from the banks themselves. With elements of good corporate governance, sound investment policy, appropriate internal control systems, better credit risk management, focus on newly–emerging business areas like micro finance, commitment to better customer service, adequate automation and proactive policies on house–keeping issues, co–operative banks will definitely be able to grapple with these challenges and convert them into opportunities.

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Article: Download PDF   DOI : 10.36106/ijar  

Cite This Article:

Dr. Bipin T. Vadhar Issues of Corporate Governance : Banking Sector Indian Journal of Applied Research, Vol.III, Issue.XII Dec 2013

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