Future Architecture of Banking and NBFCs
V. Ranganathan, Board Member
Integrity and quality of governance are key to good health and robustness of banks and non-banking financial companies (NBFCs). A good governance structure will have to be supported by effective risk management, compliance functions and assurance mechanisms.
The NBFC Sector in India has definitely not remained unaffected by the developments taking place worldwide. Enhancing the level of the corporate governance structure of Indian NBFCs is imperative. The purpose of designing a set of codes for Corporate Governance is to enhance the efficiency of auditing process in order to retain the interests of all the stakeholders and investors.
India’s banking sector is frequently under the spotlight, and usually for unflattering reasons, from an insupportable pileup of loans gone bad (non-performing assets or NPAs in banking parlance) to outright fraud to cronyism or worse. The rot is endemic, has hit banks small and big, including some well-regarded names, and is by no means limited to the public sector.
Author of the article took a look into the architecture of existing system of Indian Banking and NBFCs and proposed some suggestions for future steps, so India’s ailing financial Institution could recover from NPAs and support economic recovery.
