Letter to BS: Banks need professional boards for better governance

Since the Reserve Bank of India nominee on PSB boards is part and parcel of all decisions, the apex bank's role as a regulator fails

This refers to the editorial “Conflict of interest” (August 24). At a time when the public sector banks (PSBs) are saddled with bad assets, reforms are needed to save them from further losses. For better governance and to drive growth, banks need professional boards. Oversight and regulatory roles of the banking regulator need to be tightened. Since the Reserve Bank of India (RBI) nominee on PSB boards is part and parcel of all decisions, the apex bank’s role as a regulator fails. Yes, large divergence in asset classification has been detected by the RBI inspectors but fixing the responsibility and accountability will always be difficult. RBI’s plea to the government is justified and it must be allowed to withdraw its nominees from the PSB boards.

V S K Pillai, Kottayam Letters can be mailed, faxed or e-mailed to: 

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