The Hindu Business Line : Basel document has many gaps: Experts

The document does not deal with the developmental functions that banks could fulfil for the benefit of the whole economy and is conspicuously silent on corporate social responsibility.

Hyderabad , Oct. 17

EXPERTS at a day-long regional roundtable meet of bankers here on Monday stressed the need to substantially redraft the consultative document on corporate governance in banking prepared by the Basel Committee on Banking Supervision (BCBS)/Bank for International Settlements (BIS).

The former Director of Commonwealth Secretariat, London, Mr Michael Gillibrand, said the document needed to be redrafted to remedy the gaps that were considered to be both deficiencies from established best practice and apparently conflicting with international standards.

At the roundtable organised by the Academy of Corporate Governance (ACG), Mr Gillibrand said the focus of the document on the internal governance of banks appeared to be exclusive and the document did not deal with the external relations of banks. It did not deal with the developmental functions that banks could fulfil for the benefit of the whole economy.

Mr Michael Gillibrand, who is also an adviser of ACG, viewed that the consultative document is conspicuously silent on corporate social responsibility, which not only includes social impacts but also environment, employment and business ethics.

The ACG Founder Trustee, Prof Y.R.K. Reddy, the Academy has prepared certain observations and suggestions on the BCBS consultative document. These observations and suggestions were being placed before the regional roundtable of central bankers, chairmen/directors of commercial banks, cooperative banks and academic experts in the field.

The former RBI Governor and Managing Director of Institute of Insurance and Risk Management, Mr Vepa Kamesam, viewed that the prescriptions of the BCBS on corporate governance for banking organisations were not relevant and applicable to all economies equally.

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