RBI found gaps in corporate governance of banks: Das

The Reserve Bank has found gaps in banks’ corporate governance despite issuing guidelines on the matter, Governor Shaktikanta Das said on Monday.

MUMBAI: Addressing directors of bank boards, Das said such gaps, which have been mitigated, could have caused “some degree of volatility”.

He also hit out strongly against “smart accounting” to conceal stress and bloat financial performance.

“It is...a matter of concern that despite these guidelines on corporate governance, we have come across gaps in governance of certain banks, with the potential to cause some degree of volatility in the banking sector,” Das said at the meeting specially convened by the Reserve Bank.

Bank boards and management should not allow such gaps to creep in, he said, adding that the RBI has taken up such matters with the banks at an individual level in the past.

It is the joint responsibility of the chairman of the board and the directors, both wholetime and non-executive or parttime directors, to ensure robust governance in banks, the governor noted.