Corporate Governance and Financial Performance: A Case of Indian Banking Industry

Jatinder Kaur

Abstract


The issue of Corporate Governance is of much concern for the banking sector as these financial institutions are the machines for economic growth both in developing as well as developed nations. It is extensively commended that good governance will lead to better performance. With this concept the present study attempt to examine the relationship between corporate governance and the performance of Indian banks. The study uses a sample of thirteen banks included in the S & P Bankex for the financial year 2012-2013. Corporate governance scores are calculated by the formulation of a comprehensive Index constituting different parameters of corporate governance based on SEBI regulations, previous literature and the index formulated by earlier researchers. Score obtained from the index are the independent variables. Whereas, Return on Assets is used as a measure of performance and is the dependent variable of the study. Based on the regression results, different committees constituted by the banks are significantly related with their performance.


Keywords


Corporate Governance, Corporate governance parameters, Comprehensive Index

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