A recent press report said that the Reserve Bank of India has asked select old generation private sector banks to improve governance standards
Reports said that the RBI has asked banks to improve governance structure to make sure that there is minimum intervention of the board in the day-to-day operation. It also said that the discussion on the issue of governance between the banking regulator and select bank managements took place at the central bank’s quarterly business review meeting.
The old private sector bank includes Bank of Rajasthan [Merger with ICICI going on], Bharat Overseas Bank, Catholic Syrian Bank, City Union Bank, Dhanlaxmi Bank, Federal Bank, ING Vysya Bank, Jammu & Kashmir Bank, Karnataka Bank, Karur Vysya Bank, Lakshmi Vilas Bank, Lord Krishna Bank, Nainital Bank, Ratnakar Bank, Sangli Bank, SBI Comm & Intl Bank Ltd, South Indian Bank, Tamilnadu Mercantile Bank Ltd etc.
The RBI has recently hiked base rates by 25 basic points, in order to control inflation. The hike in base rate has affected the home loan and other loan borrowers as the hike in base rates by the RBI has pushed banks to hike their lending rates.