Policy action can improve governance in banks: RBI governor

MUMBAI: In his maiden speech after taking charge in December, Reserve Bank of India (RBI) governor Shaktikanta Das has called for strengthening of corporate governance systems in banks and said that this is an area where policy action is required with a focus on transparency and accountability.

Speaking at the 9th Vibrant Gujarat Global Summit 2019, Das said that the growing size and complexity of the Indian financial system warrants strengthening of corporate governance systems in banks. More so given the incidence of financial frauds in recent times. "The government, the Banks Board Bureau and the RBI are currently engaged in developing an objective framework for performance evaluation and this should redefine the contours of corporate governance in public sector banks (PSBs) with a focus on transparency, accountability and skills," said Das.

Das took charge as the governor in a year that saw multiple bank frauds. Das' predecessor Urjit Patel had taken a tough stance against the leadership of private banks, triggering a change in management. The banking industry is watching whether the new governor will soften the central bank's stance.

On challenges before the economy, Das said the foremost priority is to preserve domestic macroeconomic and financial stability, especially in a global environment that is clouded by high uncertainty.