Rationale of Corporate Governance with reference to Banking Sector
- Dr. Dharmesh Shah (Professor),Gujarat Law Society
- Dr. J. Paterson, University of Aberdeen
Abstract:
There is a large variation in the quality of corporate governance practices adopted by firms even when they are subject to same contractual environment. Therefore, it is possible that firms within the same country have widely divergent standards of overall corporate governance. This leads to the fact that different Indian firms could have varying standards of corporate governance disclosures.
In India due to various scams and corporate failures with recent scam of Satyam the standards of corporate governance has been made more severe. The history of Corporate Governance dates back with the early measures adopted by the CII in terms of setting up corporate governance standards. Thereafter, the formation of Kumar Mangalam Birla Committee and adoption of its suggestion in mid-2000 and inclusion of Clause 49 was one of the significant initiatives in order to make firms listed to comply and adhere to good corporate governance standards. The clause lays down corporate governance guidelines for the listed Indian companies.
The present paper aims at analyzing the corporate governance standards complied by the major private and public sector banks in India listed in BSE100. It provides useful insights into comparing and contrasting corporate governance practices of public and private sector banks. This paper focuses on a comparative analysis made between each banks with respect to their compliance of statutory corporate governance practices.