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“CORPORATE GOVERNANCE OF ITC”
SUBMITTED IN THE PARTIAL FULFILLMENT TOWARDS THE AWARD OF MASTER OF BUSINESS ADMINSTRATION 2008-2010
UNDER THE SUPERVISION OF:
G.L.A Institute of Business Management Mathura (U.P.)
(Affiliated to U.P. Technical University, (LUCKNOW)
It is well evident that work experience is an indispensable part of every professional course. In the same manner practical training in any organization is must for each and every individual, who is undergoing management course. Without the practical exposure one cannot consider himself as a qualified capable manager. Hence to fulfill this requirement of research report was completed at under guidance Mr. Utkal khandelwal. At first everything seems strange and unheard but as the time passes one understands the concept and working of the organization and thereby develop professional relationship. Initially it is felt as if classroom study was irrelevant and it is unless in any concern working. But gradually it is realized that all basic fundamental concepts studied are linked in one or other ways to the organization. But how and what can be done with fundamentals depends upon the intellectual and applicability of the individual
I hereby declare that the Research project: “Analysis of Corporate Governance Practice in Banking Sector “submitted for the degree of master in business administration Research project done by me under guidenance of Mr. Utkal khandelwal under, towards fulfillment of requirement for the MBA course of G.L.A Institute of Business Management Mathura (U.P) 2008-10;
I further declare that this study or any part thereof has not been submitted for any other degree.
I would like to take this opportunity to express my deep sense of gratitude to all those who, directly or indirectly made this project possible. I have got considerable help and support in making this project report a reality from many people. I would like to thank Mr. Utkal khandelwal (Faculty of MBA) whose endeavor for perfection, under fatigable zeal, innovation and dynamism contributed in a big way in completing this project. This work is the reflection of his thought, ideas, concept and above all his modest effort.
TO FIND OUT THE CORPORATE GOVERNANCE IN BANKING SECTOR Introduction to the topic Review of Literature Need / Rational of study (Expected Contribution of the research work) Objectives of Research Research Methodology * Research design * Sample design Proposed Plan of Study (Chapter Outline) Limitations of Study References/ Bibliography .
The banking industry is also not spread from this competition.Introduction to the topic INTRODUCTION CONCEPTUAL FRAMEWORK In today‟s world there is a end throat competition in each industry. The non-employed officials (such as students) are totally unbiased for their preference. Now the bank employees need not to wait to get the introduction from the top position to take decision. we try to find out the problems of the corporate governance and with the help of questionnaire. . With the introduction of corporate governance in banking sector the banking is made much easier and transparent. The reason of assigning such a project to a management student is to get frank feedbacks from the bank employees about the exact picture of the corporate governance. Hence to make the working easy and transparent the banks accepted corporate governance. we try to reach the bank employees/managers and ask them about corporate governance. With increasing competition the banks have to pay entire attention on their working. Through the survey study.
A related but separate thread of discussions focus on the impact of a corporate governance system in economic efficiency. management and the board of directors. There has been renewed interest in the corporate governance practices of modern corporations since 2001. An important theme of corporate governance is to ensure the accountability of certain individuals in an organization through mechanisms that try to reduce or eliminate the principal-agent problem. particularly due to the high-profile collapses of a number of . policies. banks and other lenders. such as the stakeholder view and the corporate governance models around the world (see section 9 below). regulators. laws and institutions affecting the way a corporation is directed. with a strong emphasis on shareholders welfare. Other stakeholders include employees. The principal stakeholders are the shareholders. customers. customs.MEANING OF CORPORATE GOVERNANCE Corporate governance is the set of processes. There are yet other aspects to the corporate governance subject. suppliers. administered or controlled. Corporate governance is a multi-faceted subject. the environment and the community at large. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed.
S. shareholders and other stakeholders. the US federal government passed the Sarbanes-Oxley Act. firms such as Enron Corporation and WorldCom. 3. such as contracts. the board. "Corporate governance is a field in economics that investigates how to secure/motivate efficient management of corporations by the use of incentive mechanisms. Definitions 1. . it . managers. such as. By doing this. intending to restore public confidence in corporate governance. how the corporate owners can secure/motivate that the corporate managers will deliver a competitive rate of return". “Corporate governance deals with the ways in which suppliers of finance to corporations assure themselves of getting a return on their investment”.large U. "Corporate governance is the system by which business corporations are directed and controlled. and spells out the rules and procedures for making decisions on corporate affairs. This is often limited to the question of improving financial performance. 2. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation. In 2002. The Journal of Finance. organizational designs and legislation. for example.
4. page 15].also provides the structure through which the company objectives are set.". OECD's definition is consistent with the one presented by Cadbury [1992. as its relationship to society -…. and the means of attaining those objectives and monitoring performance". OECD April 1999.which can be defined narrowly as the relationship of a company to its shareholders or. "Corporate governance . from an article financial Times An Organisational Framework for Corporate Governance Shareholders ← boards of directors (Principals) ← ← ← ← Use and role of share stake ↓ Delegates authority market for corporate control CEO and Executive debt structure of the firm Management (Agents) product market competition ↓ Agent actions implicit incentives and constraints . more broadly.
HISTORY The subject of corporate governance leapt to global business limelight from Relative obscurity after a string of collapses of high profile companies. There have been debates . Enron. revealed significant and deep-rooted Problems in their corporate governance. been an important field of query within the Finance discipline for decades. It was clear that something was amiss in the area of corporate governance all over the world. Worse. shocked the business world with both the scale and age of their unethical and illegal operations. amidst public outcry over excessive Compensation. Dick Grasso.. Large and trusted companies from Parma at in Italy to the Multinational newspaper group Hollinger Inc. While corporate Practices in the US companies came under attack. it appeared that the problem was far More widespread. they seemed to indicate only the tip of a dangerous iceberg. the Houston. the telecom behemoth. and WorldCom. Researchers in finance have actively investigated the topic for at least a quarter century1 and the father of modern economics. Even the prestigious New York Stock Exchange had to remove its director. Adam Smith. Corporate governance has. of course. himself had recognized the problem over two centuries ago. Texas based energy giant.
Indeed corporate governance and economic development are intrinsically linked. There are several channels through which the causality works. 3. The proportion of private credit to GDP in countries in the highest quartile of creditor right enactment and enforcement is more than double that in the countries in the lowest quartile. 2. Effective corporate Governance enhances access to external financing by firms. Corporate governance has been a central issue in developing countries long before the recent spate of corporate scandals in advanced economies made headlines. in turn. the differences in the quality of corporate Governance in these developed countries fade in comparison to the chasm that exists Starting from the seminal “agency problem” paper of Jensen and Macklin (1976). However.about whether the Anglo-Saxon market. Effective corporate governance systems promote the development of strong financial systems – irrespective of whether they are largely bank-based or market-based – which. Between corporate governance standards and practices in these countries as a group and those in the developing world. . as well as higher growth and employment. have an unmistakably positive effect on economic growth and poverty reduction.model of corporate governance is better than the bank based Models of Germany and Japan. leading to greater investment.
. 5. Poor corporate governance also hinders the creation and development of new firms. 6. The return on assets (ROA) is about twice as High in the countries with the highest level of equity rights protection as in countries with The lowest protection. As for equity financing. There is a variation of a factor of 8 in the “control premium” (transaction price of shares in block transfers Signifying control transfer less the ordinary share price) between countries with the highest level of equity rights protection and those with the lowest.4. 7 Good corporate governance can significantly reduce the risk of nation-wide financial crises. 8 Indeed poor transparency and corporate governance norms are believed to be the key reasons behind the Asian Crisis of 1997. Effective corporate governance mechanisms ensure better resource allocation and Management raising the return to capital. the ratio of stock market capitalization to GDP in the countries in the highest quartile of shareholder right enactment and enforcement is about four times as large as that for countries in the lowest quartile. There is a strong inverse relationship between the quality of corporate governance and currency depreciation. Good corporate governance also lowers of the cost of capital by reducing risk and creates higher firm valuation once again boosting real investments.
a history of managing agency system. These potential problems of corporate governance are universal. and a generally high level of corruption. Finally. All these features make corporate governance a particularly important issue in India. the Indian financial sector is marked with a relatively unsophisticated equity market vulnerable to manipulation and with rudimentary analyst activity. good corporate governance can remove mistrust between different stakeholders. In addition. a dominance of family firms. .Such financial crises have massive economic and social costs and can set a country several years back in its path to development. reduce legal costs and improve social and labor relationships and external economies like environmental protection. Limited liability and dispersed ownership – essential features that the jointstock company form of organization thrives on – inevitably lead to a distance and inefficient monitoring of management by the actual owners of the business. Making sure that the managers actually act on behalf of the owners of the company – the stockholders – and pass on the profits to them are the key issues in corporate governance. Managers enjoy actual control of business and may not serve in the best interests of the shareholders.
They elect a Board of Directors to monitor the running of the company on their behalf. appoints a team of managers who actually handle the day-to-day functioning of the company and report periodically to the Board. Even if this power pattern held in reality. in turn. The numerous shareholders who contribute to the capital of the company are the actual owners of business. is as follows. Consequently. The central issue is the nature of the contract between shareholder representatives and managers telling the latter what to do with the funds contributed by the former. The main challenge comes from the fact that such contracts are necessarily “incomplete”. Central issues in Corporate Governance The basic power structure of the joint-stock company form of business. Thus mangers are the agents of shareholders and function with the objective of maximizing shareholders‟ wealth. no contract can be written between representatives of shareholders and the management that specifies the right course of action in every situation. it would still be a challenge for the Board to effectively monitor management. 9 The list of possible situations is infinitely long. so that the management can be held for violation of . The Board. in principle.2. It is not possible for the Board to fully instruct management on the desired course of action under every possible business situation.
On his part the CEO frequently packs the board with his friends and allies who rarely differ with him. can potentially use . The reality is even more complicated and biased in favor of management. The efficient limits to these powers constitute much of the subject of corporate governance. Consequently the supervisory role of the Board is often severely compromised and the management. Clearly the former does not have the expertise or the inclination to run the business in the situations unspecified in the contract.such a contract in the event it does something else under the circumstances. managers wield an enormous amount of power in joint-stock companies and the common shareholder has very little say in the way his or her money is used in the company. so these residual powers must go to management. Often the CEO himself is the Chairman of the Board of Directors as well. In real life. Because of this “incomplete contracts” situation. Most shareholders do not care to attend the General Meetings to elect or change the Board of Directors and often grant their “proxies” to the management. who really has the keys to the business. some “residual powers” over the funds of the company must be vested with either the financiers or the management. the Managing Director in British-style organizations ) functions with negligible accountability. In companies with highly dispersed ownership. Even those that attend the meeting find it difficult to have a say in the selection of directors as only the management gets to propose a slate of directors for voting. the manager (the CEO in the American setting.
the acquiring company would get rid of the existing management.corporate resources to further their own self. As this would drive down the share price. the company would become takeover target. This mechanism. presupposes the existence of a deep and liquid stock market with considerable informational efficiency as well as a legal and financial system conducive to M&A activity. It is thus the fear of a takeover rather than shareholder action that is supposed to keep the management honest and on its toes. The underlying premise is that shareholders dissatisfied with a particular management would simply dispose of their shares in the company. however. The inefficacy of the Board of Directors in monitoring the activities of management is particularly marked in the Anglo-Saxon corporate structure where real monitoring is expected to come from financial markets. If and when the acquisition actually happens.interests rather than the interests of the shareholders. An alternative corporate governance model is that provided by the bank-based economies like Germany where the main bank(“House bank” in Germany) lending to the company exerts considerable influence and carries out continuous project-level supervision of the management and the supervisory board . these features do not exist in developing countries like India. More often than not.
Box 1 gives a brief comparison of the two systems. Legal environment. ownership patterns and Corporate Governance The legal system of a country plays a crucial role in creating an effective corporate governed mechanism in a country and protecting the rights of investors and creditors.has representatives of multiple stakeholders of the firm. The legal environment encompasses two important aspects – the protection offered in the laws (de jure protection) and to what extent the laws are enforced in real . 3.
11 Legal systems in most countries have their roots in one of the four distinct legal systems – the English common law. The English common law countries lead the four systems in the shareholder rights index with an average of 4 (out of a maximum possible 6) followed by Scandinavian origin countries with an average score of 3 with the French-origin and German-origin countries coming last with average scores of 2.33 each. French civil law. Both these aspects play important roles in determining the nature of corporate governance in the country in question.life (de facto protection). The first index captures the extent to which the written law protected shareholders while the latter reflects to what extent the law is enforced in reality. for instance has a . Recent research has forcefully connected the origins of the legal system of a country to the very structure of its financial and economic architecture arguing that the connection works through the protection given to external financiers of companies – creditors and shareholders. Thus. India. The Indian legal system is obviously built on the English common law system. German civil law and Scandinavian civil law. Researchers have used two indices for all these countries – a shareholder rights index ranging from 0 (lowest) to 6 (highest) and a rule of law index ranging 0 (lowest) to 10 (highest) – to measure the effective protection of shareholder rights provided in the different countries studied. English-origin legal systems provide the best protection to shareholder lder rights.
highest in the sample examined – equal to that of the USA. This difference in protection of shareholders‟ rights has led to completely different trajectories of financial and economic developments in the different countries.17 on this index – ranking 41st out of 49 countries studied – ahead only of Nigeria.00 for German and French-origin countries respectively). UK. Germany. Indonesia. Sri Lanka. Here the Scandinavian-origin countries have an average score of 10 – the maximum possible – followed by the German-origin countries (8. Canada. Thus it appears that Indian laws provide great protection of shareholders‟ rights on paper while the application and enforcement of those laws are lamentable. Pakistan and South Africa (all English-origin. The English-origin systems spawn the highest number of firms per capita (on average 35.45 companies per million citizens as compared to 27.79 and 10.05).shareholder rights index of 5. Colombia.68).46) and French-origin countries (6. India. English-origin countries (6. for instance has a score of 4. Japan and Switzerland. The ratio of the stock . They are also the best performers in mobilizing external finance. The Rule of law index is another story. Hong Kong.law countries) and better than all the other 42 countries in the study including countries like France. Zimbabwe. Peru and Philippines. Most advanced countries have very high scores on this index while developing countries typically have low scores.26 for Scandinavian-origin countries and 16. Pakistan.
This particularly hurts the development of new firms and the . 12.in books. India has 7.46. As for the ratio of external capital to GNP. substantially higher than the average ratio for German. India has a score of 0. The primary difference between the legal systems in advanced countries and those in developing countries lies in enforce me rather than in the nature of laws.21 respectively.30 and 0. entrepreneurs and managers find it difficult to signal their commitment to the potential investors.e. shareholders other than the three largest shareholders in each company) to the GNP of a country averages a remarkable 0. one of the lowest for English-origin countries but higher than many French-origin countries and Germany. 0.market capitalization held by minority shareholders (i.79 companies per million citizens.60 for the English-origin countries. In an environment marked by weak enforcement of property rights and contracts. Enforcement of laws play a much more important role than the quality of the laws on books in determining events like CEO turnover and developing security markets by eliminating insider trading. leading to limited external financing and 12 See Bergdorf and Classes (2004) ownership concentration. Scandinavian and French-origin countries of 0.31 which puts it in the upper half of the sample.
employee monitoring and social control. most Asian countries are marked with concentrated stock ownership and a preponderance of family-controlled businesses while state-controlled enterprises form an important segment of the corporate sector in many of these countries. Corporate governance issues have been of critical importance in Asian countries particularly since the Asian crisis which is believed to have been partly caused by lack of transparency and poor corporate governance in East Asian countries 13 Research has established the evidence of pyramiding and family control of businesses in Asian countries. particularly East Asia. proxy fights and executive compensation – lose their effectiveness. . shareholder activism. Apart from the universal features of corporate governance. In spite of their substantial variation in economic conditions and politicolegal backgrounds. In such a situation many of the standard methods of corporate governance – market for corporate controls. Even in 2002. board activity.1%. though this feature is prevalent in India as well. the average shareholding of promoters in all Indian companies was as high as 48. Asian economies as a group share certain common features that affect the nature of corporate governance in the region. Large block-holding emerges as the most important corporate governance mechanism with some potential roles for bank monitoring.small and medium enterprises (SMEs).
The state is an important party in . Similar to the effects for US companies. Weak property rights are also behind the prevalence of family-owned businesses – 13 See Claessens and Fan (2003) for a survey the literature on corporate governance in Asia. Poor development of external financial markets also contributes to these ownership patterns. organizational forms that reduce transaction costs and asymmetric information problems.17 During the 90‟s Indian business groups evidently tunneled considerable amount of funds up the ownership pyramid thereby depriving the minority shareholders of companies at lower levels of the pyramid of their rightful gains. It is believed that this is a result of the ineffectiveness of the legal system in protecting property rights. The effect of this concentrated ownership by management in Asian countries is not straightforward.family) groups in Asia are relatively scarce. Empirical analyses of the effects of ownership by other (non.14. Concentrated ownership and family control are important in countries where legal protection of property rights is relatively weak. family run companies with lower control by the family perform better than those with higher control. in several East Asian countries. 15 In Taiwan. firm value rises with largest owner‟s stake but declines as the excess of the largest owner‟s management control over his equity stake increases. Recent research has also investigated the nature and extent of “tunneling” of funds within business groups in India.
22 See Box 2 for a discussion of a few typical features of Asian companies and their implications for corporate governance. notably India and China.linear effects of entrenchment are also present with state ownership. on the other hand. Several studies show that accounting performance is lower for state-owned enterprises in China.N External and minority representation in boards as well as participation by professionals are rare though increasing in Asian companies. In many Asian countries. foreigners and lending institutions.19 Ownership by other groups like directors.18 Institutional investors fulfill an important certification role in emerging markets. corporate governance is not entirely ineffective in Asia. In post-liberalization India. CEOs are more likely to lose their jobs when corporate performance is poorer. . . The premium for control is significant in most Asian countries and as high as 10% of the share price in Korea21. but there is little evidence of their effectiveness in corporate governance in Asia.20 Hostile takeovers are all but absent in Asian countries. The non. foreign ownership helps performance only if the foreigners constitute the majority shareholders. Equity ownership by institutional investors like mutual funds has limited impact of performance in India. appear to improve performance.some countries in Asia. including India. Nevertheless. The corporate governance mechanism and efficiency in state controlled companies are generally deemed to inferior.
At independence.4. four functioning stock markets (predating the Tokyo Stock Exchange) with clearly defined rules governing listing. India emerged far better endowed than most other colonies. India inherited one of the world‟s poorest economies but one which had a factory sector accounting for a tenth of the national product. therefore. a well-developed equity culture if only among the urban rich. Corporate Governance in India – a background The history of the development of Indian corporate laws has been marked by interesting contrasts.24 In terms of corporate laws and financial system. trading and settlements. and a banking system replete with well-developed lending norms and recovery procedures. Companies Act as well as other laws governing the functioning of joint-stock companies and protecting the investors‟ rights built on this foundation. The turn towards socialism in the decades after independence marked by the 1951 Industries (Development and Regulation) Act as well as the 1956 Induction . This section draws heavily from the history of Indian corporate governance in the beginning of corporate developments in India were marked by the managing agency system that contributed to the birth of dispersed equity ownership but also gave rise to the practice of management enjoying control rights disproportionately greater than their stock ownership.
the Industrial Development Bank of India and the Industrial Credit and Investment Corporation of India – together with the state financial corporations became the main providers of longterm credit to companies. nepotism And inefficiency became the hallmarks of the Indian corporate sector. Borrowers therefore . Their nominee directors routinely served as rubber-stamps of the management of the day. the corporate governance system resembled the bank-based German model where these institutions could have played a big role in keeping their clients on the right track. they also held large blocks of sha res in the companies they lent to and invariably had representations in their boards. promoters of businesses in India could actually enjoy managerial control with very little equity investment of their own. Unfortunately. In this respect. The situation grew from bad to worse in the following decades and corruption. Exorbitant tax rates encouraged creative accounting practices and complicated emolument structures to beat In the absence of a developed stock market. With their support. the Unit Trust of India. protection and widespread red-tape that bred corruption and stilted the growth of the corporate sector. Along with the government owned mutual fund.Policy Resolution put in place a regime and culture of licensing. the three all-India development Finance institutions (DFIs)– the Industrial Finance Corporation of India. they were themselves evaluated on the quantity rather than quality of their lending and thus had little incentive for either proper credit appraisal or effective follow-up and monitoring.
Protection of creditors‟ rights has therefore existed only on paper in India. after which period the delay has roughly doubled. it is hardly surprising that banks. Financial disclosure norms in India have traditionally been superior to most Asian . This sordid but increasingly familiar process usually continued till the company‟s net worth was completely eroded. Given this situation. but this would be the stage where India‟s bankruptcy reorganization system driven by the 1985 Sick Industrial Companies Act (SICA) would consider it “sick” and refer it to the Board for Industrial and Financial Reconstruction (BIFR). This stage would come after the company has defaulted on its loan obligations for a while. As soon as a company is registered with the BIFR it wins immediate protection from the creditors‟ claims for at least four years. Between 1987 and 1992 BIFR took well over two years on an average to reach a decision. by which time the assets of the company are practically worthless. flush with depositors‟ funds routinely decide to lend only to blue chip companies and park their funds in government securities. Frequently they bled the company with impunity.routinely recouped their investment in a short period and then had little incentive to either repay the loans or run the business. the legal process takes over 10 years on average. Very few companies have emerged successfully from the BIFR and even for those that needed to be liquidated. siphoning off funds with the DFI nominee directors mute spectators in their boards.
Boards of directors have been largely ineffective in India in monitoring the actions of management.countries though fell short of those in the USA and other advanced countries. who could and should have played a particularly important role. The Institute of Chartered Accountants in India has not been known to take action against erring auditors. They are routinely packed with friends and allies of the promoters and managers. . in flagrant violation of the spirit of corporate law. in reality minority shareholders have often suffered from irregularities in share transfers and registrations – deliberate or unintentional. the boards of directors have largely functioned as rubber stamps of the management. Consequently. have usually been incompetent or unwilling to step up to the act. While the Companies Act provides clear instructions for maintaining and updating share registers. Minority shareholders have sometimes been defrauded by the management undertaking clandestine side deals with the acquirers in the relatively scarce event of corporate takeovers and mergers. The nominee directors from the DFIs. Noncompliance with disclosure norms and even the failure of auditor‟s reports to conform to the law attract nominal fines with hardly any punitive action. Sometimes non-voting preferential shares have been used by promoters to channel funds and deprive minority shareholders of their dues.
it has played a crucial role in establishing the basic minimum ground rules of corporate conduct in the country. Concerns about corporate governance in India were. Listing requirements of exchanges enforced some transparency.For most of the post-Independence era the Indian equity markets were not liquid or sophisticated enough to exert effective control over the companies. 5 Changes since liberalization The years since liberalization have witnessed wide-ranging changes in both laws and regulations driving corporate governance as well as general consciousness about it. but non-compliance was neither rare nor acted upon. however. Perhaps the single most important development in the field of corporate governance and investor protection in India has been the establishment of the Securities and Exchange Board of India (SEBI) in 1992 and its gradual empowerment since then. largely triggered by a spate of crises in the early 90‟s – the Hashed Mehta stock market scam of 1992 followed by incidents of companies allotting preferential shares to their promoters at deeply discounted prices as well as those of companies simply disappearing with . minority shareholders and creditors in India remained effectively unprotected in spite of a plethora of laws in the books. All in all therefore. Established primarily to regulate and monitor stock trading.
One of the first among such endeavors was the CII Code for Desirable Corporate Governance developed by a committee chaired by Rahul Bajaj. An outline Provided by the CII was given concrete shape in the Birla Committee report of SEBI. The SEBI committee recommendations have had the maximum impact on changing the corporate governance situation in India. . The committee was formed in 1996 and submitted its code in April 1998. The Advisory Group on Corporate Governance of RBI‟s Standing 25 Go swami (2002) Committee on International Financial Standards and Codes also submitted its own Recommendations in 2001. Table 1 provides a comparative view of the recommendations of these important efforts at improving corporate governance in India. Later SEBI constituted two committees to look into the issue of corporate governance – the first chaired by Kumar Mangle Birla that submitted its report in early 2000 and the second by Narayana Murthy three years later. These concerns about corporate governance stemming from the corporate scandals as well as opening up to the forces of competition and globalization gave rise to several investigations into the ways to fix the corporate governance situation in India.investors‟ money. A comparison of the three sets of recommendations in Table 1 reveals the progress in the thinking on the subject of corporate governance in India over the years.
as of March 31. Corporate governance norms should not become just another . however. Figure 1 shows the frequency of compliance of companies to the different aspects of the corporate governance regulation. Besides in the area of corporate governance. to companies with a paid up capital of Rs.SEBI implemented the recommendations of the Birla Committee through the enactment of Clause 49 of the Listing Agreements. paid much-needed attention to the subject of share transfers which is the Achilles‟ heel of shareholders‟ right in India. to other listed companies with a paid up capital of over Rs. 2002. 10 crore or with a net worth of Rs. on March 31. Clearly much more needs to be accomplished in the area of compliance. Consequently. The Narayana Murthy committee worked on further refining the rules. and all newly listed companies. the spirit of the laws and principles is much more important than the letter. 25 crore at any time in the past five years. 2003. They were applied to companies in the BSE 200 and S&P C&X Nifty indices. developing a positive culture and atmosphere of corporate governance is essential is obtaining the desired goals. 3 crore on March 31. The Birla Committee. 2001. The recommendations also show that much of the thrust in Indian corporate governance reform has been on the role and composition of the board of directors and the disclosure laws.
It is. Government control or monitoring of banks. therefore.6. Given the pivotal role that banks play in the financial and economic system of a developing country. the possibility of corruption and diversion of credit of . brings in its wake. Corporate Governance of Banks the topic Nowhere is proper corporate governance more crucial than for banks and financial institutions. It is partly for these reasons that prudential norms of banking and close monitoring by the central bank of commercial bank activities are essential for smooth functioning of the banking sector. on the Levine (2003) Other hand. Existence of explicit or implicit deposit insurance also reduces the interest of depositors in monitoring bank management activities. The very nature of the business makes it extremely easy and tempting for management to alter the risk profile of banks as well as siphon off funds. Two main features set banks apart from other business – the level of opaqueness in their functioning and the relatively greater role of government and regulatory agencies in their activities. bank failure owing to unethical or incompetent management action poses a threat not just to the shareholders but to the depositing public and the economy at large. The opaqueness in banking creates considerable information asymmetries between the “insiders” – management – and “outsiders” – owners and creditors. much more difficult for the owners to effectively monitor the funk toiling of bank management.
The reforms have marked a shift from hands-on government control interference to market forces as the dominant paradigm of corporate governance in Indian banks. Competition has been encouraged with the issue of licenses to new private banks and more power and flexibility have been granted to the bank management both in directing credit as well as in setting prices. market institutions have been strengthened by government with attempts to infuse greater transparency and liquidity in markets for government securities and other asset markets. Along with these changes. Asset quality. The RBI has moved to a model of governance by prudential norms rather from that of direct interference. Audit committees in banks have been stipulated . Earnings.Political purposes which may. Management. jeopardize the financial health of the bank as well as the economy itself. in the long run. the Board for Financial Supervision (BFS) inspects and monitors banks using the “CAMELS” (Capital adequacy. even allowing debate about appropriateness of specific regulations among banks. From 1994. This market orientation of governance disciplining in banking has been accompanied by a stronger disclosure norms and stress on periodic RBI surveillance. Liquidity and Systems and controls) approach.
The need for professional advice in the election of executive directors is increasingly realized. Rural co-operative banks are frequently run by politically powerful families as their personal fiefdoms with little . limiting the possibilities of professional l excellence and opening the possibility of misdirecting credit. properly manage the banks within the broad prudential norms set by RBI. As for old private banks.since 1995. There is increasing emphasis on greater professional representation on bank boards with the expectation that the boards will have the authority and competence to Reddy (2002) summarizes the reforms -era policies for corporate governance in Indian banks. thus allowing for “related party” transactions for banks. Corporate governance in co-operative banks and NBFCs perhaps need the greatest attention from regulators. Nominee directors – from government as well as RBIs – are being gradually phased off with a stress on Boards being more often elected than “appointed from above”. Rules like no lending to companies who have one or more of a bank‟s directors on their boards are being softened or removed altogether. Greater independence of public sector banks has also been a key feature of the reforms. concentrated ownership remains a widespread characteristic.
The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. corporations and society. focuses on the principles on which it is based. However. These principles such as transparency. The aim is to align as nearly as possible the interests of individuals. The foundation of any structure of corporate governance is disclosure. accountability. . Corporate governance is concerned with holding the balance between economic and social goals and between individual and community goals. fairness and responsibility are universal in their application. therefore. Corporate Governance and the World Bank The World Bank Report on Corporate Governance recognizes the complexity of the very concept of corporate governance and. which inspire trust. It is generally believed that the “new” private banks have better and more professional corporate governance systems in place.professional involvement and considerable channeling of credit to family businesses. Openness is the basis of public confidence in the corporate system and funds will flow to those centers of economic activity. the recent collapse of the Global Trust Bank has seriously challenged that view and spurred serious thinking on.
Banking business is becoming more complex and diversified. some big banks in the public sector and a few in the private sector had incurred substantial losses. act as trustees of the depositors. have been regulating banks more tightly than other corporate.Banks deal in people’s funds and should. “With the rapid pace of financial innovation and globalization. this is not and need not be so for two reasons: (i) The depositors collectively . All other considerations would fall in place once these two are achieved. therefore. Why Corporate Governance in Banks ? “Banks exist because they are willing to take on and manage risks”. therefore. protecting the interests of depositors becomes a matter of paramount importance to banks. Moreover. the objective of governance in banks should first be protection of depositors‟ interests and then be to “optimize” the shareholders‟ interests.4 Besides. In other corporate. (ii) Even in a regulated set-up as it was in India prior to 1991. the face of banking business is undergoing a sea-change. To sum up. Risk taking and management in a less regulated competitive market will have to be done in such a way that investor‟s confidence is not eroded. Regulators the world over have recognized the vulnerability of depositors to the whims of managerial misadventures in banks and.
the objective of governance in banks should first be protection of depositors‟ interests and then be to “optimize” the shareholders‟ interests. BASEL COMMITTEE ON CORPORATE GOVERNANCE In 1988. almost all countries adopted these regulations for their banks. the Bank for International Settlement (BIS)-based Basel Committee on Banking Supervision or came out with regulations were regarding the capital for requirements banks. have been regulating banks more tightly than other corporate. therefore. It is found that in India. .5 times the shareholders‟ stake in banks as early as in March. in due course. Banks deal in people‟s funds and should. Although these essentially intended internationally operating banks. (ii) The depositors are very large in number and are scattered and have little say in the administration of bank.entrust a very large sum of their hard-earned money to the care of banks. act as trustees of the depositors. To sum up. All other considerations would fall in place once these two are achieved. Regulators the world over have recognized the vulnerability of depositors to the whims of managerial misadventures in banks and. therefore. the depositor‟s contribution was well over 15. 2001.
particularly following the East Asian crisis and the collapse of certain hedge funds in New York which threatened to bring down banking systems of the US and the developed world. Run the day-to-day operations of business. . corporate governance involves the manner in which the business and affairs of individual institutions are governed by their boards of directors and senior management affecting how banks Set corporate objectives (including generating economic returns to owners). Consider the interests of recognized stakeholders. but the world's central banks speeded up the process of compliance. From a banking industry perspective. The crux of the Basel I requirements is the assignment of risk weights for different assets in a bank‟s book and aggregating the risk-weighted assets of which 8 percent was recommended as the capital of the bank. India adopted Basel I norms in 1992 closely following the inception of economic reforms. The Committee's recommendations were not mandatory.
Basel Committee published a paper on Corporate Governance for Banking Organizations in September. The Committee felt that it was the responsibility of the banking supervisors to ensure that there was effective corporate governance in the banking industry. . 19998. Sound corporate governance could also contribute to a collaborative working relationship between bank managements and bank supervisors. Unless there is transparency of information related to decisions and actions. which in turn would lead to effective and more meaningful supervision. it would be difficult for stakeholders to make management accountable. and in compliance with applicable laws and regulations. and Protect the interests of depositors. Basel Committee insisted banks to establish accountability for executing these strategies. Supervisory experience underscores the need for having appropriate accountability and checks and balances within each bank to ensure sound corporate governance. Align corporate activities and behavior with the expectation that banks will operate in a safe and sound manner.
incorporating a hierarchy of required approvals from individuals to the board of directors. These papers have highlighted the fact that strategies and techniques that are basic to sound corporate governance include: The corporate values. senior management and the auditors. where the importance of corporate governance has been emphasized. The clear assignment of responsibilities and decision-making authorities. Establishment of a mechanism for the interaction and cooperation among the board of directors.From the perspective of banking industry. corporate governance also includes in its ambit the manner in which their boards of directors govern the business and affairs of individual institutions and their functional relationship with senior management. The Basel Committee has also issued several papers on specific topics. A well-articulated corporate strategy against which the success of the overall enterprise and the contribution of individuals can be measured. . codes of conduct and other standards of appropriate behavior and the system used to ensure compliance with them.
g. risk management functions. day- to-day running of the Direct line supervision of different business areas. and other checks and balances Special monitoring of risk exposures where conflicts of interest are likely to be particularly great. senior management. The financial and managerial incentives to act in an appropriate manner offered to senior management. and Appropriate information flows internally and to the public. and . large shareholders. independent of business lines. Oversight by individuals not involved in the various business areas. There are four important forms of oversight that should be included in the organizational structure of any bank in order to ensure appropriate checks and balances: Oversight by the board of directors or supervisory board. traders). promotion and other recognition. including business relationships with borrowers affiliated with the bank. or key decision-makers within the firm (e. including internal and external audit functions. business line management and employees in the form of compensation.Strong internal control systems.
Second. banks have an overwhelmingly dominant position in developing the economy‟s financial system. Corporate governance in banks has assumed importance in India post-1991 reforms because competition compelled banks to improve their performance . Third. Corporate Governance in Indian Banks Although the subject of corporate governance has received a lot of attention in recent times in India. and are extremely important engines of growth. banks are also the channels through which the country‟s savings are collected and used for investments. Fourth. First. Independent risk management and audit and functions. For several reasons. banks in India are the most significant source of finance for a majority of firms in Indian industry. India has recently liberalized its banking system through privatization. corporate governance issues and practices by Indian banks has received only a scanty notice. disinvestment and has reduced the role of economic regulation and consequently obtained greater autonomy and freedom with regard to managers of banks have running of banks. as the country‟s financial markets are underdeveloped.
known as the Ganguly Group. viz. etc. experience and track record. Composition of Boards Boards should be more contemporarily professional by inducting technical and specially qualified personnel. viz. formal qualification. verification reports from market... strategic planning. technology and systems. To ensure this. companies could call upon the . credit recovery etc. To ensure this. i. risk management. companies could call upon the candidates for Directorship to furnish necessary information by way of self-declaration.Directors should fulfill certain “fit and proper” norms.e.Directors should fulfill certain “fit and proper” norms. experience and track record.. will be of interest. There should be a blend of “historical skill” set and “new skill” set.. . formal qualification. treasury operations. skills such as marketing. Ganguly Committee’s Recommendations To introduce corporate governance practices in the banking sector the recommendations of the Working Group of Directors of Banks Financial Institutions..
may be adopted for private sector banks also. delineating his/her responsibilities and making him/her abide by them. Selection of Directors could be done by a nomination committee of the Board. The banks may enter into a “Deed of Covenant” with every non-Executive Director. . Need-based training should be imparted to the Directors to equip them govern the banks properly. verification reports from market..candidates for Directorship to furnish necessary information by way of selfdeclaration. The Reserve Bank of India (RBI) also might compile a list of eligible candidates. Certain criteria adopted for public sector banks such as the age of Director being between 35 and 65. etc. that he / she should not be a member of Parliament / State Legislatures etc.
This paper explores the boards of Directors behind the 12 listed Banks on the Hong Kong Stock Exchange. type of directors in terms of independence. and the service providers themselves. . this paper finds that overall listed Banks in Hong Kong exhibit good corporate governance. All listed Banks were audited by Big Four audit firms. and that most directors hold other director positions.Review of Literature Hong Kong is known for its financial sector significance. their qualifications. in particular of its popularity within the Banking industry for the range of services it provides. that some directors are highly educated in terms of holding masters or doctorate degrees. It researches the number of directors on the boards. outside directorships held and the auditors of the financial statements. that there is a mixture of independent and executive directors. Through the use of archival data over a three year period. The three year comparison demonstrates that the high level of corporate governance exhibited by the 12 listed banks in Hong Kong from 2004 to 2006 provides a possible explanation to the success of the region in terms of being a significant international financial centre. That generally the CEO is not the chairman.
. By this research we tried to provide the basis to the retailers so that they can design their functionality and services in that way so that the customer of the retail organization will be loyal and become the permanent customer to the organization. explanatory models of corporate culture and employee behavior. The study is an attempt to analyze the corporate governance in banking sector.g. In the same way . they all have the need of monetary and non – monetary perks. If anybody is engaged in providing physical or mental service e. a researcher conduct a research in order to dig out some kind of specific knowledge which can help in the advancement of normal life.Need / Rationale of the Study There is always a need behind to perform the things. – an accountant is preparing accounts for company. a doctor is giving prescription to the patient or a professor is giving lecture in the classroom. The review on Corporate governance shown that marketing researchers must first come to terms with the meaning of Corporate governance before they can begin to understand its role in more comprehensive.
To know the dependence of the corporate governance. 2. Studying the norms & regulatory framework regarding corporate governance. .OBJECTIVES 1. To find out whether banks really follows the corporate governance. To find out the mechanism & control of corporate governance. To find out the systematic problems of corporate governance. 3. 4. Presenting overall picture of corporate governance in banking sector. 6. 5.
Research Methodology RESEARCH DESIGN: A Research project always is framed in a specific framework or blueprint of research for the problem. Sampling Frame: All the Employees S. which would enable the company to take rational decisions regarding further process.HDFC. This is because the sample size is taken large and techniques adopted were for mass data.I. “A research design is simply the frame work or plan for a study that is used as a guide in collecting and analyzing the data. .ICICI. The data observation is tabled and the results are in the form of percentage. Sampling Element: Individual respondent was the sampling element. 2. Sampling Design Population: All the Bank employees of Gwalior region. Hence this framework for research is known as the research design. It is blue print that is followed in completing a research study”. The research process designs the way of conducting research in conclusive and statistical manner. Sampling Technique: Convenient sampling technique Sampling Size: 150 Respondents was the sample size. PNB. The Study The study was exploratory in nature with survey had been used as method for collecting data to complete the study 2.B.
.4 Tools Used for Data analysis.2. 2. Item to total correlation: To check the internal consistency of the questionnaires. Tools Used for Data Collection Self-designed questionnaire was used to collect the data with the Likert type scale Which consist nominal ranking of 1-5 where 1 represented minimum agreement and 5 represented the maximum agreement with the statement. Reliability test: To check the reliability of the questionnaires Factor Analysis: To find out the underlying factors in the questionnaires.
No. Under this co-relation of every item with total was measured and the computed value was compared with standard value (0. Items Computed correlation value 0.471462 Consistent Accepted . Consistency Measure Consistency Measure (Public banks) Consistency of all the factors in the questionnaires was checked through item to total co-relation.490203 Consistency Accepted/dr opped Accepted 1 Bank follow the corporate governance Consistent 2 Are you satisfy with the corporate governance culture in your bank 0.15915 for 150 respondents). The factors having item to total correlation lower than the critical value were declared as inconsistent and dropped from the questionnaire.1 Showing Item to Total Correlations for the Measure Evaluating S. Results & Discussions 3. Table 3..
392254 satisfaction? Consistent Accepted 8 it helpful in business expansion? 0.612752 Consistent Accepted 6 it quite helpful in profit maximization 0.263229 Consistent Accepted 5 Find yourself comfortable with the corporate governance concept? 0.505281 Consistent Accepted 9 Routine decisions influenced by the top management? 0.59803 Consistent Accepted governance 4 The bank follows the corporate governance provisions & Recommendations according to Reserve Bank of India? 0.392758 Consistent Accepted 7 it helpful in customer 0.3 Is the performance of bank is depend upon the corporate? 0.488848 Consistent Accepted .
520626 healthy is this only a show-case thing? Consistent Accepted 14 Favor of the separate customer relationship management wing in your bank? 0.10 employees aware or follow the guidelines given by top management satisfied with the work of your recovery agent organization follow the RBI norms regarding recover 0.460875 Consistent Accepted 16 0.476715 Consistent Accepted 13 Competition should be 0.434474 Consistent Accepted 17 satisfied with the organization culture in your bank 0.532415 Consistent Accepted 15 Effect of corporate governance on customer loyalty satisfied with the pay scale given by the bank 0.501642 Consistent Accepted 11 0.464085 Consistent Accepted .430434 Consistent Accepted 12 0.
443414 Consistent Accepted 19.489912 Consistent Accepted 24. Organization Climate of the bank 0. transfer policy 0. Does the organization have any kind of mechanism for rotating board members? Does the organization undertake a review to ensure that actions decided at meetings have been taken? Does the company disclose the remuneration policy in the annual report? 0.472226 Consistent Accepted 25. Reward system 0. 0.472471 Consistent Accepted 22.494835 Consistent Accepted 23.18. 0.50712 Consistent Accepted 21. working hour 0. promotion policy 0.516428 Consistent Accepted .458466 Consistent Accepted 20.
Items Computed correlation value 0. If the computed value is found less.46276 Consistency Accepted/droppe d 1 Bank follow the corporate governance Consistent Accepted 2 Are you satisfy with the corporate governance culture in your bank Consistent 0.2 Showing Item to Total Correlations for the Measure Evaluating S.No.395201 Accepted 3 Is the performance of bank is depend upon the corporate? Consistent 0.15915 for 150 respondents. Table 3.Consistency Measure (Private Banks) Firstly consistency of all the factors in the questionnaires was checked through item to total co-relation.521474 Accepted . Under this co-relation of every item with total is measured and the computed value is compared with standard value 0. then whole factor/statement is dropped and will be termed as inconsistent.447773 Accepted governance 4 The bank follows the corporate governance provisions & Recommendations according to Reserve Bank of India Consistent 0.
5 Find yourself comfortable with the corporate governance concept 0.701421 Consistent Accepted 11 0.585401 Consistent Accepted .365733 Consistent Accepted 8 it helpful expansion in business 0. 0.478819 Consistent Accepted 6 it quite helpful in profit maximization It helpful in customer satisfaction? 0.567516 Consistent Accepted 7 0.548319 Consistent Accepted 9 Routine decisions influenced by the top management Consistent 0.515125 Consistent Accepted 13. Competition should be healthy is this only a showcase thing Favor of the separate customer relationship management wing in your bank 0.594799 Accepted 10 employees aware or follow the guidelines given by top management satisfied with the work of your recovery agent 0.487409 Consistent Accepted 12 organization follow the RBI norms regarding recover 0.58327 Consistent Accepted 14.
515125 Consistent Accepted 21.567516 Consistent Accepted 25. Effect of governance on loyalty corporate customer 0.15. Does the organization have any kind of mechanism for rotating board members? Does the organization undertake a review to ensure that actions decided at meetings have been taken? 0.594799 Consistent Accepted 18. Reward system 0. satisfied with the organization culture in your bank 0. transfer policy 0.521474 Consistent Accepted 24.447773 Consistent Accepted 23.52781 Consistent Accepted 20. 0.548319 Consistent Accepted 16. promotion policy 0. Does the company disclose the remuneration policy in the annual report? 0.585401 Consistent Accepted .58327 Consistent Accepted 22. satisfied with the pay scale given by the bank 0.701421 Consistent Accepted 19. working hour 0.
858 N of Items 25 Table 3. so all the items in the questionnaire are highly reliable. . reliability value is quite higher than the standard value.3 Showing Alpha Reliability Statistics for Public banks Reliability Statistics Reliability Statis tics Cronbac h's A lpha .Reliability Measure Cranach alpha methods have been applied to calculate reliability of all items in the questionnaire.900 N of Items 25 It is considered that the reliability value more than 0.7 is good and it can be seen that in both statistics.4 Showing Alpha Reliability Statistics for private banks Reliability Statistics Reliability Statis tics Cronbac h's A lpha . Reliability test using SPSS software and the reliability test measures are given below: Table 3.
724 21 how are transfer policy? .680 .20.591.3 1 Bank follow the corporate governance 2 Are you satisfy with the corporate governance culture in your bank? 3 Is the performance of bank is depending upon the corporate governance? Loading .775 20 how are promotion policy? .21.owing Factor Analysis for public bank Variables converged Factor name 1.643 . After factor analysis 8 factors were identified. Table 3.780 .2.Factor Analysis (public banks) Factor Analysis for public hospital The raw scores of 25 items were subjected to factor analysis to find out the factors that contribute towards „public Bank‟.5 Sh.
627 customer loyalty? 7.12.593 customer relationship management wing in your bank? 15 Effect of corporate governance on .8 7 Is it helpful in customer satisfaction? .15.598 14 Are you in favor of the separate .746 the top management? .14 12 Does your organization follow the RBI norms regarding recovery? 13 Competition should be healthy is this only a show-case thing? .699 9 Are your routine decisions influenced by .808 8 Is it helpful in business expansion? .9.13.627 .
430 governance provisions & Recommendations according to Reserve Bank of India? 10 Are your employees aware or follow the guidelines given by top management? 11 Are you satisfied with the work of your recovery agents? .25 5 Do you find yourself comfortable with the .709 24 Does the organization undertake a review to ensure that actions decided at meetings have been taken? 17.502 . How is Reward system? .543 23.10 4 How much the bank follows the corporate .11.19 .779 How much you satisfied organization culture in your bank? 17 19 with the .718 5.505 corporate governance concept? 25 Does the company disclose the remuneration policy in the annual report? 4.22.816 . 22.24.427 .23. Does the organization have any kind of mechanism for rotating board members? .741 working hours? .
18 16 How much you satisfied with the pay .16.736 .745 scale given by the bank? 18 Organization Climate of the bank? .
Table 3.15 Loading 8 Is it helpful in business expansion? . After factor analysis 9 factors were identified.8.17.Factor Analysis for private banks The raw scores of 25 items were subjected to factor analysis to find out the factors that contribute towards „private bank‟.918 15 Effect of corporate governance on customer loyalty? .18.918 18 Organization Climate of the bank? .6 Showing Factor Analysis for Private bank Variables converged Factor name 10.918 .594 10 Are your employees aware or follow the guidelines given by top management? .594 17 How much you satisfied with the organization culture in your bank? .
932 23 Does the organization have any kind of mechanism for rotating board members? .875 given by the bank? 3.951 22 how are Reward system? 951 23.7 7 Is it helpful in customer satisfaction? .588 4 How much the bank follows the corporate governance provisions & Recommendations according to Reserve Bank of India? .16.875 management? 16 How much you satisfied with the pay scale .482 9 Are your routine decisions influenced by the top .932 .4.9.2 2 Are you satisfied with the corporate governance culture in your bank? .22 3 Is the performance of bank is depending upon the corporate governance? .
914 .441 14 Are you in favor of the separate customer relationship management wing in your bank? .884 11.25.919 .948 24.884 25 Does the company disclose the remuneration policy in the annual report? .948 norms regarding recovery? 20 how are promotion policy .6 6 Is it quite helpful in profit maximization? .5 5 Do you find yourself comfortable with the .451 corporate governance concept? 12 Does your organization follow the RBI .1 1 Are your governance? bank follows the corporate .19 11 Are you satisfied with the work of your recovery agents? 19 working hours? .922 24 Does the organization undertake a review to ensure that actions decided at meetings have been taken? 14.922 .12.20.
860 Z. If the value of Z less then than the standard value.860 only a show-case thing? 21 how are transfer policy? .Test Z Test was applied for evaluate the differences between individual cell of research. Table 3.321512 Insignificant .21. 1.13 13 Competition should be healthy is this .96 at 5 % level of significance the null hypothesis is accepted.8 Showing summary of Z-Test Z Test Value of Z Public / Private Banks 0.
Ho1: There is a significant difference between the services of public & private Banks. .
The null hypothesis has been rejected because the Z test value (1.573498) is below the cut off value (1.96 at 5% level of significance). Therefore we can say that there is difference between the services of public & private banks
The project encountered many limitations. Inspire of the above care has been taken the results are available and are true to facts.
1. Banks were busy with their closing statements; hence time was a crucial factor.
2. Policy matters are such that banker do not give the thrust data.
3. All information collected is the first hand collection and hence may have some limiting factors.
4. Time was a major constraint in completing the project. As the project was very vast and there was paucity of time.
5. This is a concept based project, so it is very difficult to do the comparative study.
Proposed Plan of Study
Chapter No. 1 – Introduction to the topic. Chapter No. 2 – Introduction to the Organization and Implementing bodies. Chapter No. 3- Review of Literature. Chapter No. 4- Use and importance of the study. i. Conceptual Framework for analysis.
ii. Scope of the study iii. Aims and objectives Chapter No. 5- Research Methodology. Chapter No. 6- Data analysis and Results/ Findings. Chapter No.7 – Conclusion, Recommendation, Suggestions and Scope for further research.
References / Bibliography BOOKS:
1) Philip kotler & hiller (2008) marketing management 8th edition: person
2) Berman, Berry and Joel r Evans (Oct-1997)Retail Management: A strategic approach 8th edition Englewood cliffs NJ Printicehall
3) Art kleiner George Roth,” How to Make experience your company‟s best teacher” Harward business review,
4) Boris Groysberg, Aashish Nanda ,and Nitin Nuhria ( may2004) “the risky business of hiring stars “, Harward business review .
5) Country analysis 1997 “A framework to identify and evaluate the national business environment “ Harward business review.
6) Benson P Shapiro V Kasturi Rangan , john J. svioula , (Aug. 2004 ) “ staple your self to an order “ Harward” business unit review , July Aug. 2004
7) Derrel k. Rigby, Fredrick f reichheld, Philip schefter,(Feb - 2002) “avoid the four perils of CRM” Harward business review. MAGAZINES A) OUTLOOK BUSINESS (9TH FEB, 2008) B) BUSINESS STANDART (18TH FEB, 2008)
http://www.C) 4P‟S OF BUSINESS AND MARKETING (28TH MARCH.ssrn.com .scribd.com . D) INTERNET : http://www.
1 Are your bank follow the corporate governance?      Q.2 Are you satisfied with the corporate governance culture in your bank?      Q.4 How much the bank follows the corporate governance provisions & Recommendations according to Reserve Bank of India?      Q.3 Is the performance of bank is depend upon the corporate governance?      Q.QUESTIONNAIRE Q.5 Do you find yourself comfortable with the corporate governance concept?      Q. its helpful in profit maximization?      .
11 Are you satisfied with the work of your recovery agents?      Q.12 Does your organization follow the RBI norms regarding recovery?      Q.10 Are your employees aware or follow the guidelines given by top management?      Q.9 Are your routine decisions influenced by the top management?      Q.Q.13 Competition should be healthy is this only a show-case thing?      .7 Is it helpful in customer satisfaction?      Q.8 Is it helpful in business expansion?      Q.
17 How much you satisfied with the organization culture in your bank?      Q.14 Are you in favor of the separate customer relationship management wing in your bank?      Q.15 Effect of corporate governance on customer loyalty?      Q.19 working hours?      .18 Organization Climate of the bank?      Q.Q.16 How much you satisfied with the pay scale given by the bank?      Q.
24 does the organization undertake a review to ensure that actions decided at meetings have been taken?      Q.25 Does the company disclose the remuneration policy in the annual report?      .]Q.20 how are Promotion policy?      Q.22 how are Reward system?      Q.21 how are transfer policy?      Q.23 does the organization have any kind of mechanism for rotating board members?      Q.
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