CORPORATE GOVERNANCE
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Risk Management (Elective) — CAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the primary objective of corporate governance in banks?
Corporate governance aims to ensure accountability, fairness, and transparency in a bank's relationship with all its stakeholders, including shareholders, employees, customers, and regulators.
What is the meaning of 'fiduciary duty' of bank directors in corporate governance?
Directors must act in the best interest of shareholders and depositors.
Which RBI circular forms the key regulatory framework for corporate governance in Indian banks?
RBI's guidelines on corporate governance for banks are primarily guided by the 'Guidelines on Corporate Governance in Banks' issued periodically, drawing from the Basel Committee's principles and the Companies Act 2013.
What is the role of the Credit Risk Management Committee at the board level?
It oversees bank's credit risk policies, limits, and portfolio quality.
What is the role of the Board of Directors in corporate governance of a bank?
The Board is responsible for setting the bank's strategic direction, overseeing management, establishing risk appetite, and ensuring compliance with laws and regulations.
What is 'board diversity' and why is it important in bank governance?
Varied skills, gender, and backgrounds in board improve decision quality.
What does the principle of 'separation of ownership and control' mean in corporate governance?
It means that while shareholders own the bank, professional management (Board and executives) control day-to-day operations, necessitating governance mechanisms to align management's actions with shareholders' interests.
What is meant by 'Chinese walls' in the context of bank governance?
Information barriers between departments to prevent conflicts of interest.
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