New Delhi, June 5 (). In the backdrop of the lapses found in various banks in the past and the subsequent action taken by the central bank, a top RBI official has said that it is high time to plug the loopholes in the administrative set up of banks.
RBI Deputy Governor Rajeswara Rao said, at this juncture, the banking sector in India is strong, risk averse and financially sound. Therefore, it is high time to plug the gaps in the administrative structure, assurance functions and strategy for a better future.
He was addressing the bank directors’ conference organized by RBI for Public Sector Banks recently.
Rao’s remarks came days after RBI Governor Shaktikanta Das said that the central bank had found some lapses in the corporate governance of banks despite issuing guidelines on the matter.
He advised that the boards and managements of the banks should not allow such loopholes to flourish.
These views of top central bank officials come at a time when some lapses in governance of various banks have come to the fore and the RBI has taken action on them.
Rao further said in his address that bank boards often do not pay attention to matters related to conduct.
Pointing out that customer service, customer conduct and ethical behavior of employees are important for banking, Rao said that banks’ boards should pay close attention to these aspects.
Good or best practices in these areas are key soft pillars of the edifice of a successful financial institution, he added, and their importance is enhanced in the current challenging times.
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