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The most important factor which measures the health of the banking industry is the size of NPAs.
Based on these preliminary findings, a questionnaire was developed to collect specific information
on the state of corporate governance in some selected industries. It also focuses on interdependence
of board size, proportion of. African Journal of International Relations and Development.Vol. 11.
No. 1. 4. Vittal, N. 2004. Issues in Corporate Governance in India. As such the objective of this
paper is to narrow down this gap and to contribute to the body of knowledge relating to bank
governance. The BS and BI are significantly affirmatively related with ROE and positively
correlated with ROA. Non-performing assets (NPA) is one of the major concerns for banking system
in India. Annual reports of bank are used for examining the “corporate governance” practices
adopted by the bank as per clause 49 of the listing agreement. In view of transparency in
functioning, the role of different Committees has a vital role to play. The benchmark for the Index
was Clause 49 of Listing Agreement of the Stock Exchange. However, currently there is no
organization which has not been affected by the principles of corporate governance. However, still
there are numbered of areas where a lot of attention is required both from stakeholders and policy
makers and regulators. Banks are the main intermediaries in the financial system, and facilitate
resource allocation. The proportion of the capital to which each member is entitled is his share.
Financial institutions must focus on to fulfill the expectation of stakeholders while focusing on their
core target to earn profit and improve their financial strength which lead to stable economic system
of particular country. Anglo-American system of corporate governance is centered as the ownership
of an establishment and it is extensively circulated between the differences in shareholders than the
ownership of being focused on the Sarbanes Oxley Act of 2002. The questionnaire was made semi-
structured to allow for in-depth interviews with key individuals of the companies. To browse
Academia.edu and the wider internet faster and more securely, please take a few seconds to upgrade
your browser. However, we find the presence of female directors in the boards of financial
institutions suppresses the positive association between corporate governance and market risk
disclosures for the period between 2007 and 2011. This study focus on principles and methods of
Corporate Governance using in banking sector. A comparison between the indices for public sector
banks with private sector banks reveals that differences in governance structures cannot be explained
fully in terms of ownership only. You can download the paper by clicking the button above. Social
Posts Create on-brand social posts and Articles in minutes. The prospect of corporate government
practice is bright in banking industry in the country. Financial reporting and disclosure of any
information are the key factors of corporate governance. They safeguard the interest of stakeholders,
harmonize the conflictions, analyze the performance, etc. This paper empirically investigates the
influence of corporate governance mechanisms on financial performance of 25 listed banking
companies in Bangladesh over the period 2003-2011. Commercial banks, especially the dominant
public sector banks, have been facing competition from the banks in the private sector. Corporate
Governance is the term given to the management practices followed by the business organization.
The BS is affirmatively related with Tobin’s Q, but BI is significantly negatively related.
We continuously monitor all proposed new rules and modify our policies and practices to meet any
additional requirements. In the final part of the paper,measures which banks can take to reduce their
NPAs have been suggested. Therefore, corporate governance is the system by which companies are
directed and controlled. CG represents the value framework, the ethical framework and the moral
framework under which business decisions are taken. Corporate Governance. A. Legal Mechanisms
Investor Rights Board Responsibilities. Permit performance-enhancing mechanisms for stakeholder
participation 4. An outline of the bases or criteria for the review of the organisations governance. It
has been supporting to strengthen the fundamentals of Indian economy. Banks are corporations and
their firm value depends on good governance as any other firms. Corporate governance in banks is
also of interest to businesses that are dependent on bank finance. The opinions on the prospect of
Corporate Governance have been collected from the respondents on the basis of a prepared
questionnaire. Our findings show that CEO duality and audit committee size have a positive and
significant impact on the return on assets (ROA) and return on equity (ROE). The performance of
bank is increasing year on year from 2011-12 which is a sign of good governance. These systemic
rules and regulations are guidelines which pave the way for a company to achieve its goals. Section 2
presents a brief of overview of the banking industry in Bangladesh. Finally, there is a positive
significant relationship between corpor. Good corporate governance practices are important in
reducing risks for investors, attracting investment capital and enhancing performance of firms. The
aim of this paper is to observe the relationship between corporate governance and firm performance
in banking industries of Bangladesh. David Wong Chief Executive, South East Asia ABN AMRO
Bank N.V., 13 September 2006. Introduction. ABN AMRO is one of the world ’ s leading financial
institutions. It also focuses on interdependence of board size, proportion of. The study is conducted
on same set of sample banks after a gap of five years of previous study conducted by the authors in
year 2011 and published in year 2013. Bank corporate governance is particularly important in less
developed countries like Bangladesh because economic development and growth is dependent to a
large extent on well functioning, stable and soundly managed banking system. APEC countries
therefore called upon the Pacific Economic Cooperation Council (PECC) to develop a set of
guidelines which were in line with the OECD principles. So, the role of supplier is very important in
the competitive market to establish a strong position. According to principles of Corporate
Governance, institutions must prioritize the interest of all the stakeholders namely employees,
suppliers, customers as these are the ones who in turn would provide the strengthening affect to the
firm from within, but in reality institutions fail to prove themselves on this part. Houghton mifflin
math homework book grade 4 answersHoughton mifflin math homework book grade 4 answers. The
banking sector in India has undergone several changes in the areas of prudential, regulatory,
disclosure, and supervisory norms. It has been passing through the liberalisation process and
deregulation of interest rates regime at the same time, while facing the competition from new
generation private and foreign banks. In the background of these developments, this study strives to
examine the state of affair of the Non performing Assets (NPAs) of the public sector banks and
private sector banks in India with special reference to weaker sections. A sound corporate
governance guides on the structure and role of board of directors, internal as well external audit and
risk management. Despite the expansion, the operational efficiency of the banking institutions has
continued to be dismal. However, still there are numbered of areas where a lot of attention is
required both from stakeholders and policy makers and regulators. The results of the study show that
there has been a reduction in the NPA ratios over the research period, which indicates improvement
in the asset quality of Indian public sector banks, private sector banks, and foreign banks.
Keeping these into consideration, this present study has been attempted to find out the corporate
governance factors that affect bank performance. At the same time for financing larger investment,
investors need to know the functions and usefulness of merchant banking. SBI and HDFC Bank are
the leading banks in theirrespective sectors. Corporate governance is the policies, rules and
regulations, by which a corporation shapes the way corporate officers, managers, and stakeholders
perform their duties to create wealth for the entity. Rather almost every bit of bank’s investment are
financed by the depositor’s fund. These companies should abide all the rules established in the
agreement. Full implementation of the Code in all banks of Bangladesh would undoubtedly take a
number of years and would require the cooperation of a vast number of relevant stakeholders (BEI,
2004). Deals with the problems arising from the separation of ownership and control.. Separation of
Ownership and Control. Lecture Outline Briefly discussion on principle-agent or agency problem.
Passing the responsibility of control to independent directors may not be the solution, in light of the
specialised expertise and considerable time required for these roles, and the abysmal track record of
independent directors in managing the oversight of the executive management in private sector
banks. Bangladesh Bank (2009), “Bank and Financial Institutions”, available at: (accessed 30
October 2009). 10. Corporate Governance Practices in AB Bank available at Appendix: The Board of
Directors and the management of TD are committed to leadership in corporate governance. He
mentioned that a recent example of poor decision-making had been a decision by the board to invest
a large amount of money in developing a major new product, only to discover later t hat there were
serious concerns about the environmental impact of the product and a very high probability that the
product would. Key Words: CAMEL variables, New Private sector banks, Public sector banks,
Liberalisation and deregulation. Banks are corporations and their firm value depends on good
governance as any other firms. Corporate governance in banks is also of interest to businesses that
are dependent on bank finance. But still, corporate governance by public limited companies that
trade on the national capital market is given priority. The performance of bank is increasing year on
year from 2011-12 which is a sign of good governance. The financial sector reforms started in 1991
had provided the necessary platform for banking sector to operate on the basis of operational
flexibility and functional autonomy that will lead to enhancement in productivity, efficiency and
profitability. Despite the expansion, the operational efficiency of the banking institutions has
continued to be dismal. Statistical sample includes four major public and private sector banks.They
were State Bank of India, Punjab National Bank, HDFC Bank and AXIS Bank, being in the list of
top five banks in India.The resultsof previous study found that private sector banks have shown
better performance on all the dimensions of CAMEL and following ranks have been assigned HDFC
Bank-1 st rank, AXIS Bank-2 nd rank, PNB-3 rd rank and SBI-4 th rank. Social Posts Create on-
brand social posts and Articles in minutes. For analyzing the data and testing hypothesis Pearson’s
correlation and OLS regression models are used to assess the relationship among the performance of
the banks and CG related predictor variables like Board Size (BS), Board Independence (BI), Audit
Committee (AC), Risk Management Committee (RMC), and some control variables like Firm Age
(FA), Firm Size (FS) and Market Capitalization (MC). For evaluating the performance of Indian
commercial banks, the world renowned CAMEL Model is adopted. There are few very encouraging
indicators showing the acceptance of reforms in the letter and spirit by the financial sector. However,
a problem, which is how the CCG can be fully implemented, needs to be considered. Corporate
Governance: relationship between these three parties. We continuously monitor all proposed new
rules and modify our policies and practices to meet any additional requirements. The questionnaire
was made semi-structured to allow for in-depth interviews with key individuals of the companies.
The show, a version of a phone-in, was broadcast live on national television at 11am on Sundays and
lasted on average six hours. Commercial banks, especially the dominant public sector banks, have
been facing competition from the banks in the private sector. In general, CG deals with laws,
procedures, practices and implicit rules that determine company’s ability to take managerial decisions
vis-a-vis its claimants—in particular, its shareholders, creditors, customers, the State and employees.
Research paper on corporate governance pdf 2019-02-27. At the same time, a good number of banks
and corporations became weakened over the years, and the consequent collapse of the stock market
caused colossal losses to investors, where the absence of firm-level corporate governance was sharply
identified. Sample essay on trustSample essay on trust best essay topics for kids how to write a
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creative writing activities elementary fitness gym business plan sample paintball field business plan
templates guidelines for research paper korean war essay introductions. This paper empirically
investigates the influence of corporate governance mechanisms on financial performance of 25 listed
banking companies in Bangladesh over the period 2003-2011. This requires trust from all the
stakeholders, and trust emanates good governance. Bank in developing countries are faced with high
risk of sharking as a result of heavy government ownership, lack of prudential regulation, weak legal
protection and presence of special interest group. Last Lecture Review Introduction Who care about
the firm 1. The present study is an attempt to examine the financial performance of Indian banks
based on the CAMEL variables and to find out whether the average performance of new private
sector and public sector banks differ significantly across the two bank groups for the period of study,
i.e. from 2003-04 to 2007-08. Assure that rights of stakeholders are protected by law 2. The
ownership structure of the organization. 2. The financial structure of the corporation. 3. The structure
and functioning of the company boards and the associated internal control systems 4. This set of
guidelines forms the standard for individual Governments, regulatory bodies and professional bodies
to develop their agendas and with a view to setting up acceptable codes of practice. 6. Scenario in of
Corporate Government practice in Banking Sector: Banking companies pose unique corporate
governance attention as they differ greatly with other types of firms in terms of broader extent of
claimants on the banks assets and funds. Independent Directors An independent director is the one
who does not have any monetary relationship with the organization, its owners, subsidiary, affiliate
firm, promoters or directors during 2 financial years immediately preceding it or during the current
financial year. The major reasons for the increasing graph of nonperforming assets are focusing on
quantitative aspect of achieving targets and less attention towards qualitative aspect of lending of
money. GIFs Highlight your latest work via email or social media with custom GIFs. The
questionnaire was made semi-structured to allow for in-depth interviews with key individuals of the
companies. Similarly, consultation with academics and researchers were also conducted to further
broaden the study questionnaire survey. Last Lecture Review A BoDs is a body of elected or
appointed members who jointly oversee the activities of a company. Panel data analysis has been
conducted for the top nine public and private commercial banks operating in Bangladesh for a period
of 2009 to 2017. SIDBI, IFCI, HFDC, IDBI, NHB, and NABARD are selected under study.The
rationale for selection of these institutes is that being incorporated organizations, they should have
same Corporate Governance standards. This had raised the number of scheduled bank branches
under government to 84% from 31%. The various Principles of Corporate Governance are as follows:
Certain the basis for an efficient corporate governance system. This research reveals that the board of
director has a positive significant impact on ROA, ROE, and EPS. Ten (15) banking companies of
Bangladesh representing the period of 2010 to 2015 were selected purposively used in this study. In
the final part of the paper,measures which banks can take to reduce their NPAs have been suggested.
We can assure you that TD’s policies and practices meet or exceed applicable legal requirements.
Many of the problems have been attributed to lake of sound corporate governance into the banks.
The pace of movement of financial capital has become greater because of the pervasive impact of
information technology and the world having become a global village. 9 When investments take
place in emerging markets, the investors want to be sure that not only are the capital markets or
enterprises with which they are investing, run competently but they also have good corporate
governance. Unless and otherwise proper remedial measures are taken the quantum of non-
performing assets cannot be reduced and the bank will incur losses to a great extent. In discussions
with your chairman, you discover that he has serious concerns about the quality of decision-making
by the board of directors. Annual audit should be conducted by an independent auditor 4.

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