Banks and Corporate Governance

The author has come out clearly as to how Corporate Governance principles are not being adhered to in PSUs particularly in PSBs sighting the example of United Bank of India and its recent revelations.The SEBI frames rules to be pursued to ensure Corporate Governance in Corporates but it seldom ensures adherence is a fact known to all Corporates and market players. Corporate Governance in Banks particularly in PSBs are only in paper and the Government Director and Chairman as dictated by the Government have their own principles of Governance where even RBI the sole regulator of banking has limited say.These shortcomings in the adherence to Corporate Governance rules are known to all but the connections, lobbying, contacts and other under currents in the actual functioning of the Corporates including banks have a destination not known to many.Fortunately banks are not allowed to fail thanks to Government backing using tax payers money as otherwise left to themselves many banks would have failed long back. The UBI was havibg severe problems and was categorised as weak bank along with other two PSBs in the late 1990s and all the three were saved with the strong backing of the Government. Corporate Governance and even other Governance Standards are missing in our system is a truth and ethics and values are concepts only to be found in discourses.

Dr.T.V.Gopalakrishnan

( This comment is in Money Life in response to an article UBI Saga exposes many warts on the 4th of March 2014).