Ganguly Committee’s Recommendations
To introduce corporate governance practices in the banking sector the recommendations of the working group of directors of Banks Financial Institutions, known as the Ganguly Group, will be of interest.
Composition of Boards:
Boards should be more contemporarily professional by inducting technical and specially qualified personnel. There should be a blend of “historical skill” set and “new skill” set, i.e. skills such as marketing, technology and systems, risk management, strategic planning, treasury operations, credit recovery, etc.
Directors should fulfill certain “fit and proper” norms. , viz., formal qualification, experience and track record. To ensure this, companies could call upon the candidates for directorship to furnish necessary information by way of self- declaration, verification reports from market, etc.
Certain criteria adopted for public sector banks such as the age of director being between 35 and 65, that he/she should not be a member of parliament! state legislatures, etc. may be adopted for private sector banks also.
Selection of directors could be done by a nomination committee of the board. The Reserve Bank of India (RBI) also might compile a list of eligible candidates.
The banks may enter into a “Deed of Covenant” with every non-executive director, delineating his/her responsibilities and making him/her abide by them.
Need-based training should be imparted to the directors to equip them govern the banks properly.
The Ganguly Committee has suggested the formation of the following committees of the board, in addition to the Nomination Committee: Audit Committee, Shareholders: Redressal Committee, Supervisory Committee and Risk Management Committee. The job of the first two committees is well known in all big corporates in India.
Incidentally, the Reserve Bank has prescribed that the audit committee should be presided over by a Chartered Accountant Director, but Ganguly Committee opined that it could be done by any non-executive director
To introduce corporate governance practices in the banking sector the recommendations of the working group of directors of Banks Financial Institutions, known as the Ganguly Group, will be of interest.
Composition of Boards:
Boards should be more contemporarily professional by inducting technical and specially qualified personnel. There should be a blend of “historical skill” set and “new skill” set, i.e. skills such as marketing, technology and systems, risk management, strategic planning, treasury operations, credit recovery, etc.
Directors should fulfill certain “fit and proper” norms. , viz., formal qualification, experience and track record. To ensure this, companies could call upon the candidates for directorship to furnish necessary information by way of self- declaration, verification reports from market, etc.
Certain criteria adopted for public sector banks such as the age of director being between 35 and 65, that he/she should not be a member of parliament! state legislatures, etc. may be adopted for private sector banks also.
Selection of directors could be done by a nomination committee of the board. The Reserve Bank of India (RBI) also might compile a list of eligible candidates.
The banks may enter into a “Deed of Covenant” with every non-executive director, delineating his/her responsibilities and making him/her abide by them.
Need-based training should be imparted to the directors to equip them govern the banks properly.
The Ganguly Committee has suggested the formation of the following committees of the board, in addition to the Nomination Committee: Audit Committee, Shareholders: Redressal Committee, Supervisory Committee and Risk Management Committee. The job of the first two committees is well known in all big corporates in India.
Incidentally, the Reserve Bank has prescribed that the audit committee should be presided over by a Chartered Accountant Director, but Ganguly Committee opined that it could be done by any non-executive director