Top-flight PSB boards needed for resilience

Asset quality of lenders has improved, but financial resilience in a system is best built in good times. It is time for the RBI to press the governance accelerator

Earlier this year, the Reserve Bank of India (RBI) brought renewed focus to corporate governance at banks with Governor Shaktikanta Das laying down a 10-point charter. The poor quality of information – material inaccuracies, missing facts, and the delayed circulation of agenda papers that often take the shape of “guided tour” — came in for censure. The dominance of chief executive officers (CEOs) in board discussions and lack of activism of both the boards and chairmen to ensure an environment for free discussions — besides evergreening of loans – attracted the Governor’s wrath.

Effective regulation, good internal controls and effective