The Finance Ministry has directed public sector banks (PSBs) to undertake a third-party evaluation of their Boards’ performance, in the wake of instances of misgovernance at the helm of a few lenders that also raise questions about the scrutiny exercised by their Boards, a senior Government official told Business Standard. “Since a couple of governance issues have arisen in the banking sector, we have directed PSBs to get an external agency evaluation to assess key aspects of corporate governance, including their Board composition, structure and overall effectiveness,’ the official said.
“The exercise should examine the oversight and functioning of Board-level Committees and the Boards’ effectiveness in areas like ethics, compliance, risk management, independence and alignment with the institution’s vision and strategy.”
Some lenders have already initiated this process, including State Bank of India, Bank of Baroda, Punjab National Bank, Union Bank of India and Central Bank of India, while UCO Bank, Indian Overseas Bank, Bank of India, Canara Bank, Punjab & Sind Bank, Indian Bank and Bank of Maharashtra are expected to undertake the exercise soon, the official conveyed. “These evaluations are being undertaken by the professional consultancy firms, such as Deloitte Touche Tohmatsu India LLP and KPMG India Services LLP,” he noted.
Source : https://m.rediff.com/news/commentary/2025/jul/07/fin-min-asks-psbs-to-evaluate-board-performance/0171419ecf56e53dde6a194ec111e3b9
