A Study of Corporate Governance in Public and Private Sector Banks in India

doi:10.21203/rs.3.rs-2113740/v1

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A Study of Corporate Governance in Public and Private Sector Banks in India

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Corporate governance has been the most discussed topic among economists and administrators for more than two decades now. It is said to increase fairness in decision making, transparency in practices and procedures and thereby engender better performance of responsibilities, proper risk management and effective accountability. The developed nations were the first to embrace this system of governance. Indian firms adopted it a little later. However, currently there is no organization which has not been affected by the principles of corporate governance. Although a few government departments are still on their path to fully implement it, most of the Indian firms, PSUs and institutions are already experienced enough to experiment with different forms of corporate governance. In this paper, we will discuss the successes and failures of four large public and private sector banks in India, i.e. State Bank of India (SBI), Punjab National Bank (PNB), HDFC Bank and ICICI Bank, in their pursuit to institutionalize corporate governance. We will see which strategies worked for them and which did not. We will also provide some way forward to overcome the issues.

Corporate governance

public sector banks

private sector banks

Indian banks

governance

banking in India

Corporate governance is defined, described or delineated in diverse ways, depending on the writer's purpose. Writers focused on a disciplinary interest or context (such as accounting, finance, law, or management) often adopt narrow definitions that appear purpose-specific. Writers concerned with regulatory policy in relation to corporate governance practices often use broader structural descriptions. A broad (meta) definition that encompasses many adopted definitions is "Corporate governance describes the processes, structures, and mechanisms that influence the control and direction of corporations." As per Organization for Economic Cooperation and Development (OECD), "Corporate governance involves a set of relationships between a company's management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined". Corporate governance essentially involves balancing the interests of a company's many stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, the government, and the community. Since corporate governance provides the framework for attaining a company's objectives, it

encompasses practically every sphere of management; from action plans and internal controls to performance measurement and corporate disclosure.

The OECD set out its corporate governance principles in 1999 and revised them in 2004. Basel Committee on Banking Supervision (under the aegis of the BIS) published guidelines on corporate governance in banks in 1999. It also revised the guidelines in 2006 being influenced by the then banking scandals and revised OECD principles on the same topic.

There is considerable divergence in the understanding and practice of corporate governance in general, and in respect of banks, in particular, but there is also an increasing tendency towards convergence. The cultural context may be difficult to capture but the legal, institutional and attitudinal contexts do vary perceptibly across countries. At the same time, the trend towards greater convergence is for several reasons. The corporations are getting listed in multiple stock exchanges in different countries and carry out corporate operations in several jurisdictions while the cross-border financial flows seek an assurance of some commonly understood standards of governance, which have a mutually reinforcing tendency. Banks, in particular, have been a subject of special interest for governance, especially in view of their fiduciary role. The cross-border operations of banks provide an added impetus for convergence in such standards.

Public policy framework in regard to corporate governance typically involves multiplicity of agencies in all countries. For instance, in India, these are Department of Company Affairs; Securities and Exchange Board of India (SEBI) in respect of listed entities apart from the banking regulator in respect of banks. Harmonizing their policies in a dynamic setting is a daunting task for policy makers and adds to the complexities of the corporations or banks concerned to ensure compliance.

In regard to sectors such as banking in India where ownership of government is dominant, there are additional issues. Government, as an owner, is accountable to political institutions in terms of broader socio-economic objectives and hence, its goals may not necessarily be compatible with purely economic incentives. Mixed ownership, with the government as a major shareholder, brings into sharper focus the possible divergent objectives of share-ownership in a corporation or a bank and issues relating to the rights of minority shareholders. The problem gets more complex if public ownership is exercised through separate legislation and not under the Company Law, normally applicable to other competing entities. The role of directors in such divergent organizational settings, therefore, needs a nuanced appreciation.

The formal policy announcement in regard to corporate governance in Indian banks was first made by Dr. Bimal Jalan in the Mid-Term Review of the Monetary and Credit Policy on October 21, 2001. Pursuant to this announcement, a Consultative Group was constituted in November 2001 under the Chairmanship of Dr. A.S. Ganguly; basically, with a view to strengthen the internal supervisory role of the Boards. An Advisory Group on Corporate Governance under the chairmanship of Dr. R.H. Patil had earlier submitted its report in March 2001 which examined the issues relating to corporate governance in banks in India including the public sector banks and made recommendations to bring the governance standards in India on par with the best international standards. There were also some relevant observations by the Advisory Group on Banking Supervision, under the chairmanship of Shri M.S. Verma, which submitted its report in January 2003. Keeping all these recommendations in view and the cross-country experience, the Reserve Bank initiated several measures to strengthen the corporate governance in the Indian banking sector. In June 2002, the report of the Ganguly Group was transmitted to all the banks for their consideration while simultaneously transmitting it to the Government of India for appropriate consideration. It may be noted here that there is a basic difference between the private sector banks and public sector banks as far as the Reserve Bank’s role in governance matters relevant to banking is concerned. The current regulatory framework ensures, by and large, uniform treatment of private and public sector banks by the Reserve Bank in so far as prudential aspects are concerned. However, some of the governance aspects of public sector banks, though they have a bearing on prudential aspects, are exempt from applicability of the relevant provisions of the B.R. Act, as they are governed by the respective legislations under which various public sector banks were set up. In brief, therefore, the approach of RBI has been to ensure, to the extent possible, uniform treatment of the public sector and the private sector banks in regard to prudential regulations. In regard to governance aspects relevant to banking, the Reserve Bank prescribes its policy framework for the private sector banks while suggesting to the Government the same framework for adoption, as appropriate, consistent with the legal and policy imperatives.

As a follow-up of the Ganguly Committee report, in Mid-Term Review of the Monetary and Credit Policy in November 2003, the concept of ‘fit and proper’ criteria for directors of banks was formally enunciated, and it included the process of collecting information, exercising due diligence and constitution of a Nomination Committee of the board to scrutinize the declarations made by the bank directors. Subsequently, the RBI guidelines on ownership and governance in the private sector banks on the similar topic were released in 2005. These guidelines mainly deal with the selection and dismissal procedure of executive and non-executive directors. Currently, Banks Board Bureau (BBB), an autonomous body established in 2016 under the Ministry of Finance (MoF), Government of India, oversees the nomination, appointment and termination process of the directors for the Nationalized Banks, Financial Institutions and Public Sector Insurance Companies. Apart from this, it performs the following tasks:

To advise the Central Government on the desired management structure of mandated institutions, at the level of Board of Directors and senior management;
To advise the Central Government on a suitable performance appraisal system for mandated institutions;
To build a data bank containing data relating to the performance of mandated institutions and its officers;
To advise the Central Government on the formulation and enforcement of a code of conduct and ethics for managerial personnel in mandated institutions.
To advise the Central Government on evolving suitable training and development programs for managerial personnel in mandated institutions
To help the banks in terms of developing business strategies and capital raising plan and the like;
Any other work assigned by the Government in consultation with the Reserve Bank of India (RBI).

So, there are mainly four stakeholders who provide supervision to the public and private sector banks in the matters of corporate governance- MoF, RBI, SEBI and BBB. (BBB primarily serves the public sector). There are many other stakeholders like, Indian Banks’ Association (IBA), trade unions and other ministries who have a say in the policy decisions. All these details describe who and how take the decisions regarding the corporate governance in public and private sector banks in India. Now, we will come to the main point of discussion of this paper, the effects of corporate governance models adopted by four of India’s largest banks. We will discuss the policies and strategies followed by these banks and the impacts these had on the annual performance of the banks.

The banking business everywhere is customer-centric, and banking in India is no exception to this phenomenon. The banks and other financial institutions therefore through their relentless efforts try to please their existing customers and attract new ones. There are several factors which affect the customer behaviour towards a bank and there is no reason to doubt that the basic rules of marketing are applicable to the banking industry as well. It implies that different customers have different needs based on different circumstances. One size fits all products just do not work. We also have to do a thorough SWOT analysis of these banks to get an idea about which products suit them and which do not. We will discuss different characteristics of these banks and the customer mix it relies on. Then we will see the policies and strategies one bank adopted in a particular time period and their impact on the performance of the bank. We will then compare the performance reports of individual banks with RBI reports on overall economy. It will give us a comparative notion about the performance of an individual bank.

We will start our evaluation with HDFC bank, then we will move to ICICI bank, then to SBI and finally we will evaluate PNB.

We will keep our discussion limited to five main characteristics-

Customer mix,
Product mix,
Infrastructure,
Rural exposure,
Communication and Synergy.

We have gathered data about these banks by means of personal visits to their branches, talking to their customers, frequently visiting their websites and most importantly by studying their annual reports. We will focus on their performance in the financial year 2021-22 (FY22) spanning 1^st April, 2021 to 31^st March, 2022. However, we will consider the impacts of the events in the recent past to understand their current position effectively.

Let us start our evaluation.

1. HDFC Bank

It is currently the largest bank in India by market capitalization. Let us evaluate this bank based upon the five characteristics mentioned before-

i. Customer Mix

As per the annual report 2021-22, the bank has approximately 7.1 crore customers, a total advance of Rs. 1368821 crore and total deposit of Rs. 1559217 crore. That gives us an approximate advance of Rs. 1.92 lakh and deposit of Rs. 2.19 lakh per customer. They have 141579 employees or 501 customers per employee.

ii. Product Mix

HDFC bank has several products for both retail and wholesale customers. It offers deposit, credit, payment, investment, forex, insurance and other products under its own brand name.

iii. Infrastructure

HDFC bank has a robust and powerful digital infrastructure as well as a wide branch network all over India and abroad. In December 2020, it faced some difficulty in its digital infrastructure and was prohibited from issuing new credit cards until further direction by RBI. RBI partially lifted the restrictions in August 2021. HDFC bank provides completely digital services such as account opening and loan disbursal with very ease. It provides a smooth experience and prompt customer support. The internal grievance redressal system is also satisfactory.

iv. Rural Exposure

HDFC bank has most of its presence in metro, urban and semi-urban area with 1843, 1312 and 2036 branches respectively. It lacks rural exposure in terms of branch network with only 1147 branches. But it compensates for that with 10748 CSC BCs and 204 other BCs. It has 7470, 4824, 4529 and 1307 ATMs and cash deposit and withdrawal machines respectively in metro, urban, semi-urban and rural areas.

v. Communication and synergy

HDFC bank has a wide array of products and a large number of branches, ATMs, cash deposit and withdrawal machines along with other service points. It has been quite successful in establishing efficient communication channels and creating synergy among all these service points.

2. ICICI Bank

i. Customer Mix

As per the annual report 2021-22, the bank has total advance of Rs. 859020 crore and total deposit of Rs. 1064572 crore. It has approximately 4.5 crore customers. That gives us an approximate advance of Rs. 1.91 lakh and deposit of Rs. 2.36 lakh per customer. They have 105844 employees or 425 customers per employee.

ii. Product Mix

ICICI bank has several products for both retail and wholesale customers. It offers deposit, credit, payment, investment, forex, insurance and other products under its own brand name.

iii. Infrastructure

ICICI bank probably has the most robust and powerful digital infrastructure among all the Indian banks. It also has a wide branch network all over India and abroad. ICICI bank provides completely digital services such as account opening and loan disbursal with very ease. It is a pioneer in this field. It provides a smooth experience and prompt customer support. The internal grievance redressal system is very efficient.

iv. Rural Exposure

The Bank’s reach in rural areas comprises a network of branches, ATMs, field staff and business correspondents (BCs) providing last-mile access in remote areas. Of the Bank’s network of 5418 branches, 51% are in rural and semi-urban areas with 649 branches in villages that were previously unbanked. The Bank has 13168 Business Correspondents (BCs) providing last-mile access to 20540 unbanked locations in remote regions. There were over 3300 ATMs in the rural and semi-urban areas as of March 31, 2022.

v. Communication and synergy

ICICI bank has a wide array of products and a large number of branches, ATMs, business correspondents (BCs) along with other service points. It has been quite successful in establishing efficient communication channels and creating synergy among all these service points.

3. SBI

i. Customer Mix

As per the annual report 2021-22, the bank has approximately 46.77 crore customers, total advance of Rs. 2733967 crore and total deposit of Rs. 4051534 crore. That gives us an approximate advance of Rs. 0.58 lakh and deposit of Rs. 0.86 lakh per customer. They have 244250 employees or 1914 customers per employee.

ii. Product Mix

SBI has several products for both retail and wholesale customers. It offers deposit, credit, payment, investment, forex, insurance and other products under its own brand name.

iii. Infrastructure

SBI has a robust and powerful digital infrastructure as well as a wide branch network all over India and abroad. But it is not as efficient as the previous two banks we discussed. It is mostly because of the huge number of transactions every instance. SBI provides digital services such as account opening and loan disbursal. But it still relies on some amount of paperwork. Customer support in SBI is not prompt but it tries its best in spite of low employee to customer ratio. The internal grievance redressal system is satisfactory.

iv. Rural Exposure

SBI has total 22266 branches, 68016 Customer Service Points (CSPs), 52158 ATMs and 12872 Automated Deposit and Withdrawal Machines (ADWMs). It has more than 8000 branches and most of its CSPs in rural areas.

v. Communication and synergy

SBI has a wide range of products and a large number of branches, ATMs, cash deposit and withdrawal machines along with other service points. It has been somewhat successful in establishing efficient communication channels and creating synergy among all these service points. However, there is still scope for improvement.

PNB

i. Customer Mix

As per the annual report 2021-22, the bank has total advance of Rs. 785104 crore and total deposit of Rs. 1146219 crore. It has approximately 18 crore customers. That gives us an approximate advance of Rs. 0.44 lakh and deposit of Rs. 0.64 lakh per customer. They have 103144 employees or 1745 customers per employee.

ii. Product Mix

PNB has several products for both retail and wholesale customers. It offers deposit, credit, payment, investment, forex, insurance and other products under its own brand name.

iii. Infrastructure

PNB has a wide branch network all over India and abroad. But its digital infrastructure is not up to the mark in this age of digitalisation. Its digital customer support system is lagging far behind the private sector banks. The internal grievance redressal system is also not up to the mark. There is a lot of scope for improvement in this regard.

iv. Rural Exposure

The Bank has one of the largest networks of 10098 branches as on 31st March, 2022, comprising 1753 metropolitan, 2035 urban, 2457 semi-urban and 3853 rural branches. Rural and semi-urban branches comprise around 63 per cent of the total branch network.

v. Communication and synergy

PNB has a wide array of products and a large number of branches, ATMs, BC points along with other service points. It has been somewhat successful in establishing efficient communication channels and creating synergy among all these service points. However, there is still scope for improvement.

If we compare the customer mix of the four banks, we will observe the following-

Private sector banks have lesser number of customers and these customers have higher amount of deposits and availed more credit. On the other hand, the number of customers in the public sector banks is higher and these customers have lesser amount of deposits and availed lesser amount of credit. By generalizing this phenomenon, we can say that the customers of private sector banks are mostly high net worth individuals and those of the public sector banks are mostly low net worth individuals.
The private sector banks have better and more effective digital infrastructure.
The public sector banks have more presence in the rural areas in terms of branch network. The private sector banks compensate for this through their large number of banking correspondent points and customer service centres.
Both the public and private sector banks have different types of products for different needs.
The private sector banks are more responsive towards the demands of their customers.
The customer to employee ratio in public sector banks is much higher than the private sector banks.

Clearly, the private sector banks are much ahead of the public sector banks in all the criteria mentioned above. But, public sector banks are far ahead in one criterion. They have immense public trust and goodwill due to their low cost products and government backing. It was not long ago that public sector banks had the sole right to deal in government business. This changed over the years and in the beginning of 2021 Government of India allowed private sector banks to participate in all kinds of government business ending the monopoly of public sector banks in government business.

Now we will prepare a chart to compare the growth of deposit and credit of the four banks in last two years and compare the growth in deposit with the RBI report on money supply.

Table 1
Growth of Deposit and Credit (figures in crore of Rupees)
Name of the Bank	Deposit as on 31.03.2020	Deposit as on 31.03.2021 (Year on Year growth in %)	Deposit as on 31.03.2022 (Year on Year growth in %)	Credit as on 31.03.2020	Credit as on 31.03.2021 (Year on Year growth in %)	Credit as on 31.03.2022 (Year on Year growth in %)
HDFC Bank	1147502	1335060 (16.34)	1559217 (16.79)	993703	1132837 (14.00)	1368821 (20.83)
ICICI Bank	770969	932522 (20.95)	1064572 (14.16)	645290	733729 (13.71)	859020 (17.08)
SBI	3241621	3681277 (13.56)	4051534 (10.06)	2325290	2449498 (5.34)	2733967 (11.61)
PNB	704000*	1106000	1146000 (3.62)	517000*	739000	785000 (6.22)

*PNB was merged with United Bank of India (UBI) and Oriental Bank of Commerce (OBC) with effect from 01.04.2021.

We will now see the money supply data of the Reserve Bank of India on 31st March for the year 2020, 2021 and 2022. It shows cumulative money supply M3 which comprises i) currency with the public, ii) demand deposits with banks, iii) time deposits with banks and iv) ‘other’ deposits with Reserve Bank of India. M3 on 31st March, 2020 was Rs. 16799963 crore, on 31st March, 2021 it was Rs. 18844578 crore and on 31st March, 2022 it was Rs. 20493729 crore. Year on year growth for 2020-21 was 12.17% and for 2021-22 it was 8.75%.

Now if we compare the year on year growth in deposit of the four banks with the year on year growth in money supply in the Indian economy, we will find that the growth in deposit in HDFC bank and ICICI bank is more than the growth in money supply in the Indian economy with a bigger margin. The growth in deposit of SBI is more than the growth in money supply but with a smaller margin. However, the growth in deposit of PNB for 2021-22 is much lower than the growth in money supply in the same period.

It is clear from the above comparison that the private sector banks are beating the public sector banks not only in terms of advances and deposits but also in terms of popularity and public trust. SBI is the only public sector bank which can compete with the performance of private sector banks. In the next section we will discuss the various reasons for this recent trend of moving from public sector banks to private sector banks and thereafter in the conclusion we will provide some way forward to improve the current situation for public sector banks.

There are several reasons why customers prefer one bank over another. These reasons vary from people to people and from place to place. Here we will cover the reasons relevant from an Indian point of view and see how they have shaped the current banking scenario in India.

1. Branch Network Coverage

People tend to prefer the bank which has its branches nearer to their residence. As we have discussed earlier, the public sector banks have more branches in rural areas compared to the private sector banks, but private sector banks are expanding their reach by means of banking correspondents and customer service points.

2. Low Cost Products

When availability of branches is not an issue, customers prefer the bank which provides low cost products, e.g. low service charges, lower loan rates etc. Previously, the public sector banks used to provide deposit products with negligible service charges whereas the private sector banks used to charge very high for services like account statement, debit card, SMS intimation etc. But recently due to the changing attitude of the board members of the public sector banks, there has been a rush to make profit out of everything.

3. Higher Deposit Rate

Middle class people especially in rural and suburban areas try to save as much as possible in the form of fixed deposits. They always chose the bank with the highest deposit rate (deposit rate means interest rate on deposit products). Previously public sector banks could provide higher rates of interest on deposit products as the rate of interest on loan products were also higher. But after the RBI directed the banks to link the loan rates with REPO rate, the public banks had no other way but to decrease their deposit rates as otherwise the cost of funds would have been very high. The private sector banks could take this as an opportunity as they could provide better deposit rates by minimizing their operational expenses. The Private sector banks could do this as they had already cut down their cost on manpower by utilizing digital infrastructure. They have also utilized their large number of banking correspondents and customer service points in this effort. These are low cost alternatives for full-fledged branches and permanent staff.

4. Convenience

In the past few decades, India has witnessed a gradual shift of its workforce towards the service sector. The new generation white and gold collar Indians are innovative, smart, and efficient among other things but they have neither the time nor patience to visit a bank branch and stand in a long queue. They would rather pay some extra bucks to do all their banking related activities from the comfort of their homes or offices. The private sector banks have benefitted highly from this attitude of the young generation and are designing new products every now and then to retain this customer base.

5. Banking Experience

People choose the bank which can provide better banking experience by means of their higher employee to customer ratio, better infrastructure, more responsiveness towards customer demand, better internal grievance redressal system etc. The private sector banks have the upper hand in all these matters. They can provide their customers with a range of customized products best suited to their needs, whereas the public sector banks have a limited range of products with little or no option of customization.

6. Government Support

Previously the public sector banks were preferred by the common people because these banks had the backing of the government of the day. Nowadays, due to the government strategy on merger and privatization, liberalization of government business (letting the private sector banks to participate in government business e.g. i. collection and distribution of government revenue, ii. payment of salaries, wages, pensions, iii. collection of fees and fines etc.) the popular sentiment about the public sector bank is changing and people are moving towards the private sector banks.

7. Stability

The public sector banks were earlier preferred due to their stability. The current public sector banks were actually nationalized with the goal of protecting them from instabilities. During the 1960s and 1970s, hundreds of banks were liquidated and the savings of the common people were lost in each instance, this created a huge instability in the Indian economy. There was also a lack of credit for the agriculture and small industries. To solve these issues 14 Indian banks were nationalized in 1969 and another 6 were nationalized in 1980. The current privatization of IDBI and merger of several public sector banks changed the public perception about the public sector banks. Moreover, the merger of several public sector banks during the peak of the second wave of covid19 pandemic made the things worse as millions of customers suffered for weeks due to lack of banking services. Due to these reasons many people shifted their dealings from the public sector banks to the private sector banks.

Corporate Governance in each public and private sector banks has been responsible for their respective growth or decline. Throughout the sections of this paper we have learnt about the various reasons behind the gradual rise of the private sector banks. Now we will try to find ways to stop the decline of the public sector banks. Let us first discuss the ‘don’ts’-

The public sector banks should not blindly follow the steps taken by the private sector banks, rather they should innovate their own way out of a situation. Increasing service charges without any added benefit is simply unfair for the people who adjust with lack of convenience and quality banking experience.

Cross-selling is a convenience, but mis-selling is a crime. Selling unnecessary products to misguided customers is not a welcome move. The private sector banks were previously the only ones to practice this malpractice. Nowadays, the public sector banks are taking a lead in this. This is another example of blindly following the private sector banks.

Upgrading software without beta testing and proper troubleshooting methodology is unforgivable. Especially the public sector banks involved in the merger showed a lack of preparedness and apathy towards the problems faced by the customers due to their semester-long software upgrade.

Making simple processes complicated is not called digitalization. Few public sector banks in the name of digitalization are taking from weeks to months to open new accounts. This is what they are doing- i. authenticating the identity of the prospective customers with the help of UIDAI and NSDL database through Aadhaar and PAN card, ii. Collecting the hardcopies of the documents, iii. Uploading the softcopies of these documents to a centralized online portal, iv. Getting these documents verified by an employee who has access to only softcopies of the documents. These make everything unnecessarily complicated and time-taking.

Now let us discuss the dos-

Strengthening the infrastructure has no alternative. Making the infrastructure capable of handling the data of a huge number of customers and at the same time making it smooth and user-friendly is the need of the hour.

Design the products as per the needs of the customers and not the other way around is the only way to build a healthy and long-lasting relation with your customer. The banks need to be responsive towards the customers’ demands.

Proper care should be given while taking a decision on technology upgrade. Employees should be trained beforehand on features and troubleshooting. Customers should be given alternate options if things don’t go as expected.

Opening accounts digitally and getting the documents verified physically is a better option. Making the customer feel at home is a must in this era of tough competition. Making a customer suffer should not be how you welcome them.

Incentivizing loyalty is the one way to retain your customers. Occasional waiver of service charges, providing exclusive higher deposit rates or giving them discounts in loan interest rates for a quarter may work like magic.

Board members and other policy makers for the public sector banks should learn from the success story of the corporate governance in the private sector banks. They should first understand the background and the thought process behind each step taken by the private sector banks and then bring the necessary changes in their decision making policy. Because blindly following the governance style of the private sector banks will not help the public sector banks.

PSU

Public Sector Undertaking

SBI

State Bank of India

PNB

Punjab National Bank

OECD

Organization for Economic Cooperation and Development

BIS

Bank for International Settlements

SEBI

Securities and Exchange Board of India

RBI

Reserve Bank of India

BBB

Banks Board Bureau

MoF

Ministry of Finance

IBA

Indian Banks’ Association

SWOT

Strengths, Weaknesses, Opportunities, Threats

Financial Year

CSC

Customer Service Centre

Banking Correspondents

ATM

Automated Teller Machine

CSP

Customer Service Point

ADWM

Automated Deposit and Withdrawal Machines

UIDAI

Unique Identification Authority of India

NSDL

National Securities Depositories Limited

PAN

Permanent Account Number

Availability of Data and Materials

The datasets generated and/or analyzed during the current study are available in the following links:

HDFC annual reports are available on https://www.hdfc.com/investor-relations#annual-reports
ICICI annual reports are available on https://www.icicibank.com/aboutus/annual.page
SBI annual reports are available on https://sbi.co.in/web/corporate-governance/annual-report
PNB annual reports are available on https://www.pnbindia.in/annual-reports.html
RBI data on money supply are available on https://rbi.org.in/Scripts/Data_MSupply.aspx

Competing Interests

The authors declare that they have no competing interests.

Funding

There is no funding involved in preparation of this paper. Every contribution made towards this paper is voluntary.

Authors’ Contributions

Author of this paper collected, compiled and presented the data already available in the public domain. Then she analyzed the data to come to a conclusion.

Acknowledgements

Mr. Suman Garai, Assistant Environmental Engineer, West Bengal Pollution Control Board and ex- Assistant Manager, Indian Bank contributed immensely in finding the sources of data, filtering of the data and interpreting the data. He was the sole motivator in choosing the topic of this paper.

Shailer, Greg. Corporate Governance, in D. C. Poff, A. C. Michalos (eds.), Encyclopedia of Business and Professional Ethics, Springer International Publishing AG, 2018. https://doi.org/10.1007/978-3-319-23514-1_155-1
OECD (2015), G20/OECD Principles of Corporate Governance, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264236882-en
What is Corporate Governance? by James Chen. https://www.investopedia.com/terms/c/corporategovernance.asp
Corporate Governance in Banks in India by Y. V. Reddy. https://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/68234.pdf

Charts 1 to 5 are available in the Supplementary Files section.

1.png
Absolute Growth of Deposit (in Crore of Rupees)
2.png
Year on Year Percentage Growth of Deposit
3.png
Absolute Growth of Credit (in Crore of Rupees)
4.png
Year on Year Percentage Growth of Credit
5.png
Absolute Growth of Money Supply (M3) (in Crore of Rupees)

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A Study of Corporate Governance in Public and Private Sector Banks in India

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Abstract

Introduction

Methods/experimental

Results

1. HDFC Bank

i. Customer Mix

ii. Product Mix

iii. Infrastructure

iv. Rural Exposure

v. Communication and synergy

2. ICICI Bank

i. Customer Mix

ii. Product Mix

iii. Infrastructure

iv. Rural Exposure

v. Communication and synergy

3. SBI

i. Customer Mix

ii. Product Mix

iii. Infrastructure

iv. Rural Exposure

v. Communication and synergy

PNB

i. Customer Mix

ii. Product Mix

iii. Infrastructure

iv. Rural Exposure

v. Communication and synergy

Discussion

1. Branch Network Coverage

2. Low Cost Products

3. Higher Deposit Rate

4. Convenience

5. Banking Experience

6. Government Support

7. Stability

Conclusion

Abbreviations

Declarations

References

chart

Supplementary Files

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