In banking parlance, the Corporate Governance refers to

conducting the affairs of a banking organisation in such a

manner that gives a fair deal to all stake holders i.e.

i. Shareholders

ii. Bank customers

iii. Regulatory authority

iv. Society at large

v. Employees

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 Why Corporate Governance

Banks are competing with other player in Banking system as

well as Financial Institutions, Mutual Funds and other

intermediaries in a new environment of liberalisation and

globalisation. Corporate Governance creates an environment to

help the operating management (Chief Executive & top

management functionaries) to enhance the stakeholders value.

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 Scope of Corporate Governance

Corporate Governance covers a variety of aspects such as

i. Protection of Shareholder’s right.

ii. Enhancing the Shareholder’s value.

iii. Issues concerning the composition and role of Board of

Directors.

iv. Deciding the disclosure requirements.

v. Prescribing the accounting system.

vi. Putting in place effective monitoring mechanism etc.

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 Parameters to judge the standard of
Corporate Governance

1) Model code for best practices.

2) Internal control system.

3) Disclosure norms – transparency.

4) Constitution & role of Board of Director & committees of the

board.

5) Policies formulated by the Board and monitoring of

performance.