Questionable corporate governance practices in some banks – from evergreening of loans to CEO dominance – have come to the regulator’s attention and the board of directors need to ensure compliance, Reserve Bank of India (RBI) Governor Shaktikanta Das has said.
“The MD & CEO is expected to function under the overall supervision, direction and guidance of the board and at the same time, maintain independence in performance of duties. At times, however, we have noticed the dominance of CEOs in board discussions and decision making. It has been seen in such cases that boards are not asserting themselves. We would not like this type of situation to develop. At the same time, there should not be a situation where the CEO is inhibited from doing his duties. Directors and CEOs should, therefore, foster an atmosphere of free and fair discussions in board meetings,” Das said in his address to board of directors of private banks.