Adopt global best practices to improve governance: Jaitley

Comments come at a time when doubts have been raised over the governance standards in India's public sector banks

Indian corporates need to learn and adopt international best practices to improve their governance standards, said Arun Jaitley, Union minister for finance, defence and corporate affairs.

“In a society, where mediocrity becomes a norm, one has to search for excellence... Governance is one area where we have to learn a lot from international best practices. At times, I used to wonder if we could grow well with moderate level of governance, with a high quality of governance, perhaps this country could have reached much greater heights,” Jaitley said during his speech at an event organised by the Institute of Company Secretaries of India (ICSI) here on Sunday.

His comments come at a time when doubts have been raised about the governance standards in India’s public-sector banks.

Earlier this month, Syndicate Bank's chairman and managing director Sudhir Kumar Jain was arrested by the Central Bureau of Investigation (CBI) for allegedly soliciting bribes and colluding with businessmen to increase the credit line of certain companies.

“I think once the economy takes off the opportunities for the Indian corporate sector will increase further. It is a challenge for us to take control of these opportunities. Therefore, by adopting the international best practices, the run-up of the corporate sector should happen in a manner, which we all can be proud of. If there are any black sheep, let them be identified and let the law be very tough on them,” Jaitley said.

He, however, did not offer any specific comments on the Syndicate Bank bribery case or the chit fund scam of West Bengal-based Saradha Group.

“The fly-by-night operators may or may not meet some instance success but they are destined to go into the dustbin,” Jaitley said without referring to any specific institution or group.

Separately, he said he has been receiving requests to amend some of the provisions of the Companies Act, 2013.

“We have a strong regulatory mechanism. For all companies, we have the mechanism under the Companies Act. Now, there is the new Companies Act and only when it is unfolding are we all realising where the shoe pinches,” Jaitley noted.

“I have started receiving innumerable number of requests to look into some of those provisions. We need to associate the best minds and best talents. Obviously, we can’t have a legislation, which dissuades them from association,” he added.