Financial institutions

rbi: Financial institutions should be board driven : RBI Dy Guv Jain

Mumbai: Financial institutions should be run by a board and not end up being dominated by individuals as this could have undesirable consequences, Reserve Bank Deputy Governor MK Jain has said. In his keynote speech at CAFRAL, a center promoted by RBI, he stressed that an efficient and dynamic financial system is crucial for the economic development and social well-being of the country.

“The governance framework surrounding the individual actors in the financial system plays a central role not only in terms of creating value for the various stakeholders, but also in providing board oversight on risk appetite and risk culture of each institution,” he said. on “The Importance of Governance and Assurance Functions in Financial Institutions”.

He also stressed that financial institutions should be run by a board of directors and not dominated by individuals.

“It is important to ensure that financial institutions are run by a board of directors and do not end up being dominated by individuals. Experience has shown that this leads to undesirable consequences,” Jain said.

Board members, he said, should focus on strategic and important issues and work cohesively.

Often, he added, a large number of agenda items are included, including table items, which do not allow for proper evaluation of proposals.

The Center for Advanced Financial Research and Learning (CAFRAL) is an independent body established by RBI in the context of the country’s changing role in the global economy.