Evaluating the Evolution and Effectiveness of Corporate Governance Frameworks in Indian Public Sector Banks

Abstract

Governance of corporations in the banking industry is an essential factor in determining the integrity of financial transactions, the confidence of stakeholders, and the stability of institutions. When it comes to Indian public sector banks (PSBs), corporate governance takes on an even larger relevance because of the direct influence that these institutions have on the functioning of the national economy and the resources that are available to the public. In this review-based paper, a comprehensive evaluation of the evolution, frameworks, and regulatory mechanisms that shape corporate governance in Indian public sector banks (PSBs) is presented. Particular attention is paid to the roles played by the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), and the Companies Act, 2013. The purpose of this article is to investigate the ways in which different policy milestones, committee recommendations (including the Narayana Murthy and Basel standards), and banking reforms have had affected governance architecture throughout the course of time. The study emphasises recurring governance concerns such as board independence, risk supervision, stakeholder engagement, and regulatory compliance by conducting a critical analysis of secondary data sources such as annual reports, RBI circulars, securities and exchange board of India notifications, and existing literature. The case references provided by Bank of Baroda facilitate the contextualisation of the shortcomings in actual execution and the answers provided by institutions. In addition, the report makes comparisons with governance processes in public banks located in other countries, with the intention of identifying global lessons that might be applied to India. In conclusion, the study provides strategic policy insights and provides a grounded perspective on how to promote corporate governance in public financial institutions in accordance with principles of openness, accountability, and sustainability.