Amid the ongoing scam in the public sector banks, even as top market voices advise investors to avoid the space, market expert Hemindra Hazari says that private sector bank’s corporate governance practices are equally poor.
Amid the ongoing scam in the public sector banks, even as top market voices advise investors to avoid the space, market expert Hemindra Hazari says that private sector bank’s corporate governance practices are equally poor. “This entire image about private sector banks having better corporate governance and asset quality has been a myth. I have been trying to expose this. Unfortunately, the stock market analysts, mainstream media and the regulator have chosen to turn a blind eye,” Hemindra Hazari, a SEBI registered research analyst told in an interview to ET Now.
Notably, while the public sector banks have been under the scanner for burgeoning NPAs in the space, the recent PNB fraud has made top market analysts to turn even more jittery regarding the space. However, Hazari pointed out to the recent allegations of Chanda Kochhar ( ICICI Bank) being involved in a possible quid pro quo deal.
“All the major agencies are investigating Mr Deepak Kochhar, his relation with Videocon, and ICICI Bank’s relationship with Videocon. Now ICICI Bank’s board comes out to defend Mrs Kochhar under such circumstances. What type of corporate governance is this? ICICI Bank’s board must realize the kind of damage it’s doing to the brand,” Hemindra Hazari told the channel.
While many market experts have said that public sector banks are not yet out of the woods, following the major Rs 11,400 crore Punjab National Bank, a few experts have maintained that the private sector banks are better in corporate governance practices. After the PNB scam fallout Hazari told ET Now that a fews of the newer private sector banks have much higher off-balance-sheet items compared to PSU banks.
“I just hope that you do not have similar things exploding in other banks — both the government sector as well as the newly coined private sector banks,” he told the channel.