Corporate Governance in Banking Industry: A Case of Indian Banking Sector Pre and Post COVID-19

For the banking industry and the economy to function correctly, corporate governance is required. Banks are critical to the economy because they facilitate the passage of funds from savers and depositors to activities that support business and contribute to economic growth. Banks’ safety and soundness are vital to financial stability, and their business practices are thus critical to economic health. Governance faults within large banks playing a significant role in the financial system can propagate problems throughout the banking sector and the economy. Corporate governance should act as a major goal for the long-term protection of stakeholders’ interests in accordance with the public interest. Shareholders’ interests would be subsidiary to depositors’ interests among stakeholders, particularly in retail banks. As a result, corporate governance ensures cooperative relevance and performance, and entails integrating members, management, and employees to policy, strategy, and decision-making processes. The present study focuses on the comparison between the expenditure incurred on corporate social responsibility pre- and post-COVID-19 crisis by banks in India, the initiatives and plans implemented so far, and the principles of Corporate Governance adopted by the banks in India. Banks, and the corporate governance of banks and other financial institutions, are unique. This is supported by empirical evidence, much of which was acquired after the financial crisis. Banks with traditional, shareholder-oriented corporate governance performed worse than banks with less shareholder-prone boards and less shareholder power. In the present study, the contribution of 15 banks, including public and private sector banks, of their average net profit towards CSR prescribed expenditure and CSR spent pre- and post-COVID-19 crisis is deliberated upon. Moreover, the study reflects the initiatives taken by both public and private sector banks to uplift society and extend their support during challenging days.