Letter to BS: CEO, boards must follow the standards of corporate governance

Clawback provisions should apply not only to private banks but also to other RBI regulated entities like NBFCs

This refers to “RBI proposes to rein in pay of pvt banks CEOs” (February 26). The central bank has drafted regulations for clawback of the bonuses and stock options of CEOs of private banks where the Reserve Bank of India (RBI) Inspection Reports reveal wide variance in classification of non-performing assets (NPAs). This provision must be extended to cases of serious shortcomings in the functioning of the boards of these banks as they play a major role in the effective functioning (or the lack of) of these organisations. A case in point is of the ICICI Bank board which, despite