ACG's views on Basel document

The Academy of Corporate Governance (ACG) today held a round-table conference of eminent academicians and people from the banking sector to deliberate and make recommendations on the Basel Committee document on 'Enhancing Corporate Governance for Banking Organisations'.

The validated document is proposed to be presented to a larger group of representatives from several countries in the Commonwealth, which will meet in Kuala Lumpur from October 22 to 24 before finalisation by the Basel Committee on Banking Supervision (BCBS)/Bank of International Settlements (BIS) by October 31, 2005, the deadline for submission.

Vepa Kamesam, MD, Institute of Insurance and Risk Management (IIRM) and former deputy governor of the Reserve Bank of India (RBI), said that regional factors needed to be taken into account to assess the relevance of the prescriptions made in the document.

Speaking on independent directors and the constitution of the board of directors, he said, borrrower-driven boards had brought some of the banks to grief. The two states that came up for a study into the failure of cooperative and urban banks were Andhra Pradesh and Gujarat, he said.

Y R K Reddy, founder trustee, ACG, in his address, said that though the BCBS document had some very good points, there were large gaps to be covered, the most important being the perspective of developing countries.

The need to look into the document was essential as it has evolved from being a guidance note to setting global standards to imposing conditionalities on countries, he said.