"State-run banks cannot have a default fall-back on the government for capital...if you are looking to raise capital...the one thing that investors always talk about is the board governance," Bhattacharya told reporters on the sidelines of a CII event.
State Bank chairperson Arundhati Bhattacharya today blamed the governance at public sector banks for poor investor appetite for them and their resultant inability to raise cheaper funds from markets. “State-run banks cannot have a default fall-back on the government for capital…if you are looking to raise capital…the one thing that investors always talk about is the board governance,” Bhattacharya told reporters on the sidelines of a CII event.
Noting that the government has been providing capital to public sector banks whenever they required, she said, “I think it’s time PSBs get out of this. But now government is very clear that it will give money only if the banks are actually efficient in all they do.”
Out of the Rs 25,000 crore that the government has earmarked for recapitalising its banks this financial year, SBI alone has got over Rs 7,000 crore so far. Last year also it had received a similar amount.Ruing the fact that many banks and organisations consider compliance of corporate governance regulations as a secondary activity, she said, “I must say it is very short-sighted way. In fact the activities that you consider as your priority are not your priority, regulations and compliance are your priority because when you fall short of regulations and compliance, your main activity will also be sorely impacted.”
Talking about the boards, she said, “The role of the board and management and how they intersect is very important for organisations to future-proof themselves from regulatory and market changes.”