RBI governor for tighter controls at PSBs, proactive independent directors

Blames lack of it for elevated levels of NPAs, capital shortfalls, fraud

Reserve Bank of India governor Shaktikanta Das called for stronger corporate governance at state-run lenders to make the country’s banking sector more efficient.

Describing the lack of strict governance as the “elephant in the room”, Das said this had led to elevated levels of non-performing assets, capital shortfalls, fraud and inadequate risk management.

“The role of independent boards in fostering a compliance culture by establishing the proper systems of control, audit and distinct reporting of business and risk management has been found wanting in some public-sector banks leading to build-up of NPAs,” Das told an audience in Ahmedabad.

State-run lenders