Corporate Governance Challenges in Indian Banks : A Public Affairs Perspective

Weak governance framework in Indian Public sector banks has paralyzed their performance with declining profitability and deteriorating asset quality. In order to tackle the governance issues in Public Sector Banks (PSBs) Indian govt. established Bank Boards Bureau (BBB) in April 2016 to revamp the existing governance structure in PSBs. However, the issue management framework of establishing BBB is not immune to several challenges and has not been able to achieve its desired objectives. This paper looks at the weak governance issue in PSBs from an issue management perspective by using the famous Jones & Chase (1979) issue management framework. In light of this framework the paper makes several recommendations to effectively address the governance challenges in PSBs in India. The findings of this paper may be useful for other emerging economies facing similar governance issues in their banking sector