CORPORATE GOVERNANCE TRANSPARENCY IN INDIAN BANKING: PUBLIC VS PRIVATE SECTOR ANALYSIS

Abstract

Corporate governance disclosure is not a cosmetic reporting option in the banking industry. It influences the depositor
confidence, market discipline, board accountability and finally the stability of a system that runs with a high leverage
and trust of the people. This paper compares the Indian banking corporate governance transparency using the lens of
public and private sector. It claims that the Indian banks have a layered form of governance: the company law, the
disclosure provisions of securities markets on listed companies, and specific governance expectations of banks
imposed by prudential regulation. However, transparency results continue to vary by ownership type due to the fact
that incentives, appointment systems, disclosure cultures, and enforcement pressures do not exist in all banks of the
public sector and the ones in the private sector. The study suggests a framework of the Bank Governance
Transparency Index (BGTI) comprising five dimensions, namely: (i) board composition and independence, (ii)
committee architecture and effectiveness, (iii) risk governance and controls, (iv) remuneration and related-party
transparency, and (v) stakeholder and digital transparency (including grievance redress and cyber-risk disclosures)
using a structured review and a comparative mapping approach. This paper combines the findings of earlier studies of
disclosure-indexes and recent governance indicators in Indian banking and formulates a conceptual framework of
transparency-risk outcomes mediated by market discipline and internal controls, and moderated by ownership type.
The contribution is applicable: a checklist-like transparency map that regulators, boards, and researchers may apply to
compare the governance reporting and find that thin transparency, in which there is compliance but no disclosure of
decision-useful information.