RBI's draft code on governance: Another attempt at passing the buck?

The RBI's draft code on governance is seen as being out of kilter even though well-intentioned, reports Raghu Mohan

“There is an inclination to write a new law or regulation, whenever some transgression takes place. You don't amend the Indian Penal Code every time a murder is committed,” says M Damodaran, chairman-Excellence Enablers. It’s a reference to the Reserve Bank of India’s (RBI’s) discussion paper on governance in banks which has raised hackles all around.

Chief executive officers (CEOs) are not to be on the nomination and remuneration committee (NRC), audit committee (AC), and the risk management committee (RMC); it is to be made of only non-executive directors (NEDs). And promoter-CEOs and non-promoter CEOs will both have to move