Journal of IMS Group

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Corporate Governance Practices and Bank Performance and Value Using Special Index for Banks:A Case Study of ICICI Bank


Affiliations
1 Aurora’s PG College, Hyderabad, India
2 IBS Business School, Pune, Maharastra, India
     

   Subscribe/Renew Journal


Corporate Governance is a complex topic because there is no clear basis as to what constitutes perfect Corporate Governance. Undoubtedly, the success of a company largely depends on sound governance mechanisms. This paper attempts to study the relationship of corporate governance practices and financial success of a firm. The aim here is to know whether there is any relationship of Corporate Governance Practices to the profitability and value of firm. The governance needs of banks are different from the other industries. The reason for such a difference is the assets and liabilities composition of a bank. ICICI Bank is considered to be the most successful private sector bank in India in terms of technology and innovations. A Corporate Governance Index for bank is prepared and it is used as a measure to know the extent of Governance Practices of ICICI Bank. The total score of the index is used to find the correlation of the Governances practices of ICICI bank and its financial performance in terms of financial indicators viz; ROA, NIM, PBV and Tobin’s Q. A stronger correlation is found to be existing between Corporate Governance Index and ROA and NIM and a weak correlation of Corporate Governance index is observed with PBV and Tobin’s Q.

Keywords

Corporate Governance Practices, Corporate Governance Index, Corporate Governance Rating, Private Bank, Financial Performance.
User
Subscription Login to verify subscription
Notifications
Font Size

  • Adhikari, P. (2014), Corporate Governance Practices: Crises And Challenges In Banking Industry In Nepal, Abhinav National Monthly Refereed Journal Of Research In Commerce & Management, 3(10), pp. 51-59

  • Aebi, V., Sabato, G. and Schmid, M. (2012). Risk Management, Corporate Governance, And Bank Performance In The Financial Crisis, Journal Of Banking & Finance, 36, pp. 3213–3226

  • Bebchuk, L., Cohen, A., and Ferrell, A. (2009). What Matters in Corporate Governance?, The Review of Financial Studies, 22(2), pp. 783-827

  • Bhagat, S., Balton, B. and Romano, R. (2008). The Promise and Peril of Corporate Governance Indices, Columbia Law Review, 108(8), pp. 1803-1882

  • Chhaochharia, V. and Grinstein, Y. (2007). Corporate Governance and Firm Value: The Impact of The 2002 Governance Rules, The Journal Of Finance, 67(4), pp. 1789-1825

  • Deb, R. (2013). Corporate Governance Practices In Indian Banks, Journal Of Business Management & Social Sciences Research (JBM&SSR), 2(5), pp. 36-50

  • http://www.sebi.gov.in/commreport/corpgov.pdf (accessed on 24th December 2016)

  • https://www.icicibank.com/aboutus/annual.page (accessed on 30th December 2016)

  • Kohli, N. and Saha, G. C. (2008). Corporate governance and valuations: Evidence from selected Indian companies, International Journal of Disclosure and Governance, 5(3), pp. 236–251

  • . Marisetty, V. B. (2011). Corporate governance survey: A holistic view for altruistic practice, IIMB Management Review, 23, pp. 30-38

  • . Pant, M. and Pattanayak, M. (2007). Insider Ownership and Firm Value: Evidence from Indian Corporate Sector, Economic and Political Weekly, 42(16), pp. 1459-1467

  • . Sehgal, A. and Mulraj, J (2007). Corporate Governance In India: Moving Gradually From A .Regulatory Model To A Market-Driven Model - A Survey, International Journal Of Disclosure And Governance, 5(3), pp. 205–235

  • . Sen, A. (2011). Corporate Governance in India: Clause 49 of the Listing Agreement, Jm International Journal Of Management Research, 1(2), pp. 162-171

  • . Tuteja, S. and Nagpal, C. S. (2013). Formulation Of Corporate Governance Index For Banks In India, Research Journal Of Finance And Accounting, 4(7), pp. 153-160

  • . Zheka, V. (2005). Corporate Governance, Ownership Structure and Corporate Efficiency: The Case of Ukraine, Managerial and Decision Economics, 26(7), pp. 451-460


Abstract Views: 279

PDF Views: 0




  • Corporate Governance Practices and Bank Performance and Value Using Special Index for Banks:A Case Study of ICICI Bank

Abstract Views: 279  |  PDF Views: 0

Authors

S. Sandhya
Aurora’s PG College, Hyderabad, India
Neha Parashar
IBS Business School, Pune, Maharastra, India

Abstract


Corporate Governance is a complex topic because there is no clear basis as to what constitutes perfect Corporate Governance. Undoubtedly, the success of a company largely depends on sound governance mechanisms. This paper attempts to study the relationship of corporate governance practices and financial success of a firm. The aim here is to know whether there is any relationship of Corporate Governance Practices to the profitability and value of firm. The governance needs of banks are different from the other industries. The reason for such a difference is the assets and liabilities composition of a bank. ICICI Bank is considered to be the most successful private sector bank in India in terms of technology and innovations. A Corporate Governance Index for bank is prepared and it is used as a measure to know the extent of Governance Practices of ICICI Bank. The total score of the index is used to find the correlation of the Governances practices of ICICI bank and its financial performance in terms of financial indicators viz; ROA, NIM, PBV and Tobin’s Q. A stronger correlation is found to be existing between Corporate Governance Index and ROA and NIM and a weak correlation of Corporate Governance index is observed with PBV and Tobin’s Q.

Keywords


Corporate Governance Practices, Corporate Governance Index, Corporate Governance Rating, Private Bank, Financial Performance.

References