Topic:-

Analysis on administrative regulation on corporate finance in

India

Submitted to :-
Ms.Priya Singh Chauhan
 Introduction
• Corporate Governance
Corporate Governance includes the policies and procedures, which is
usually adopted by a company in achieving its objectives in relation to
its shareholders, employees, customers and suppliers, regular
authorities and community at large. Corporate Governance usually
establishes a structural framework, which makes a healthy and
competitive company with self – clearing and competitiveness by
some strategies, transparency, motivation and social orientation.
Corporate Governance plays an integral part to the very existence of
a company/ organization/ Banking Sector/ Corporate Entity.
It inspires and strengthens investor’s confidence by insuring
company’s commitment to higher grow and profits
 DEFINITIONS
• Wolfensohn , President of World Bank:- “Corporate
governance is about promoting corporate fairness,
transparency and accountability”.

• the journal of Finance Shleifer and vishny :-“Corporate

governance deals with the way in which supplier of finance
to corporation assure themselves of getting a return on
their investment”
 NEED OF CORPORATE GOVERNANCE
• Corporate Governance provides proper attention towards weak
or improper supervision of banks which can have the
disproportionate effect of destabilizing a county’s economy and
indeed reducing market confidence.
• Sustaining confidence in the financial markets is one of the
most important objectives of regulatory bodies.
• Regulatory bodies need to ensure the most suitable level of
consumer protection.
• Encouraging public awareness about the financial market
through imparting educational programs is also a part of the
objectives of regulation
• The financial regulations are designed for the purpose of
reducing financial crimes and frauds.
CHALLENGES ON IMPLEMENTATION OF
CORPORATE GOVERNANCE

• Multiplicity of regulations

• Board accountability

• Lack of transparency in selection of board

members
MEASURES TAKEN BY GOI FOR IMPLEMENTATION OF
CORPORATE GOVERNANCE

• Series of efforts being made by two independent regulatory

bodies in a last few years to accomplish harmonism of
regulations policies and guidelines made applicable to the
regulated entities.
• RBI has advised, on the suggestion from the SEBI that the
Indian commercial banks (both public & private sector).
Which are listed on the stock exchanges should adopt the
guidelines of SEBI committees on corporate governance.
Limitations of Indian Financial Regulatory System

• Insufficient monitoring / regulatory mechanisms for

ensuring systemic stability of financial system and for
protection of consumer and investor rights.

• Lack of effective compliance with financial disclosures and

financial reporting standards also has negative impact on
the financial regulation.

• Inadequate infrastructure and mechanism for dispute

resolution and for coping with institutional failures is a
limitation.
The Advantages of Corporate Governance

• Purposeful strategic direction

• Improved relationships with the bank

• Improvement in profitability
 Regulatory Financial Institutions in India

• RBI - Reserve Bank of India

• Ministry of Finance

• SEBI- Securities & Exchange Board of India

• FMC - Forward Markets Commission