India’s private sector banks were held up for years as the standard of efficency and corporate governance to which public sector banks should aspire. But now it emerges that private bank after private bank has in fact been harbouring bad debts, fudged accounts, corrupt deals, gross mismanagement, overly paid CEOs and delinquent boards.
These revelations should not be treated as an unrelated series of incidents. It is time to question the theoretical underpinnings of the Reserve Bank of India’s hitherto ‘hands off’ style of regulating these banks. And time for us to realise that what goes on inside the banks concerns not only the banks, but the economy as a whole. (more…)
rupeindia 