The Reserve Bank of India (RBI) is planning to introduce new rules on corporate governance for lender in alignment with global ones, and would also like banks to disclose more, said Deputy Governor N S Vishwanathan.
Vishwanathan also asked the banks to identify losses because of NPAs as soon as possible and not to delay the same.
These comments from the Deputy Governor of central banker come at a time when the banking sector continues to suffer from the issues of asset quality, even though the new additions have slowed down.
Vishwanathan also spoke about a series of initiatives the RBI took, such as the compensation structures for key management personnel and whole-time directors being the latest additions, and also pointed out towards the future developments.
“The Basel Committee (where bankers from all over the world discuss strategies) has its own (framework on corporate governance), we are working on that to improve guidelines on that,” Vishwanathan said.
Speaking to an audience comprising of all the top bankers, he said the new guidelines will be put in public domain and the RBI will be seeking comments before finalising any rules.
Pointing towards the under-reporting scenario of NPAs which was not reported earlier and is made compulsory now, and the benefits it gets, the DG urged banks to disclose as much as possible to present a truthful picture.
“The default should be disclosed as much as I can so long as I am not hitting a provision of law or I am not providing a market strategy that is taking the bank forward,” he said.