RBI Governor asks public sector banks to strengthen governance

Reserve Bank of India Governor Shaktikanta Das on Monday asked public sector banks to further strengthen their governance and risk management with a view to identify and mitigate risks at an early stage. The governor was addressing a Conference for the Directors on the Boards of Public Sector Bank in the national capital. ‘Governance in Banks – Driving Sustainable Growth and Stability’ was the theme of the conference. In a statement, the central bank said Das acknowledged the role played by the banks in supporting the economy and maintaining resilience along with improved financial performance in the face of several adverse shocks in recent times. “He (Das) exhorted the directors of banks to further strengthen the governance and assurance functions (risk management, compliance and internal audit) so that the banks are able to identify and mitigate risks at an early stage,” it said. Das also emphasised the need for banks to ensure continued financial and operational resilience. Deputy Governors M K Jain and M Rajeshwar Rao along with executive directors representing RBI’s department of supervision and department of regulation, and other senior officials, also participated in the conference. There were technical sessions on governance and assurance functions, credit risk, operational risk, IT/cyber risk and data analytics, the statement said. On the recommendation of RBI, the government has introduced many reforms in governance and provided more autonomy to the board of public sector banks in recent times. The reforms also include an independent professional body for selection, objective and transparent selection and allotment on the basis of merit-cum-performance.