This study examines the relationship between corporate governance practices and performance of private sector banks in India and Nepal. It investigates how factors like financial literacy of directors, board size, proportion of non-executive directors, directors' equity holdings, and corporate governance disclosures relate to bank performance. The study aims to provide insights for bank regulators, investors, and other stakeholders. Primary and secondary data on governance practices and financial performance will be collected from annual reports of listed private sector banks from 2010-2015. Statistical analysis methods like correlation, regression, and hypothesis testing will be used to analyze the data.

1. Corporate Governance and Performance of
Private Sector Banks:
A Relative Study on Indian and Nepalese
Banks
HIMAL BHATTRAI
RESEARCH SCHOLAR
REVA UNIVERSITY

2.  Enlargement of Financial Arena.
 An international wave of M&A.
 Lack of stakeholder’s confidence.
 Better Financial Regulators.
 Need for a sound banking systems with good
Corporate Governance.

3.  Banks are at the heart of world's recent Financial
Crisis.
 Deterioration of their Asset Portfolios.
 Distorted Credit Management.
 Growing Financial Scandals.
 Massive deficiencies in Corporate Governance.

4.  Core Objectives:
 This study seeks to explore the relationship between
Corporate Governance Practices and Performance of
Indian Private Sector Banks contrasted with Nepal.
.

5.  Specific Objectives:
1) To examine the level of Financial Literacy of
Directors and its effects on Performance of Private
Sector Banks of India and Nepal.
2) To determine the relationship between Board Size
and Performance of Private Sector Banks of India and
Nepal.
3) To identify the effect of the proportion of Non-
Executive Directors on the Performance of Private
Sector Banks of India and Nepal.

6. 4) To investigate if there is any significant relationship
between Directors’ Equity Interest and Performance of
Private Sector Banks of India and Nepal.
5) To empirically determine if there is any significant
relationship between the level of Corporate
Governance Disclosure and Performance of Private
Sector Banks of India and Nepal.

7.  Hypothesis 1 : H0: There is no significant relationship
between Financial Literacy of Directors and
Performance of Private Sector Banks of India and Nepal.
 Hypothesis 2: H0: There is no significant relationship
between Board Size and Performance of Private Sector
Banks of India and Nepal.
 Hypothesis 3: H0: There is no significant relationship
between proportion of non executive directors and
Performance of Private Sector Banks of India and Nepal.

8.  Hypothesis 4:
H0: There is no significant relationship between
Directors’ Equity Holding and Performance of Private
Sector Banks of India and Nepal.
 Hypothesis 5:
H0: There is no significant relationship between
Corporate Governance Disclosures and Performance
of Private Sector Banks of India and Nepal.

9.  Provides value to Bank Regulators, Investors,
Academicians and other relevant Stakeholders.
 Provides insights in to the level of Financial Literacy
of Directors.
 Provides clear picture of where banks stand in
relation to the codes and principles on corporate
governance introduced by the Central Banks of
respective countries.

10.  Provides an insight into understanding the degree to
which the banks that are reporting on their
corporate governance and where they are
experiencing difficulties.
 Acts as a information of value in terms of
benchmarking.

11.  Bank plays a vital role in the economy of the developing
countries.
 Good governance in Banking is essential for the survival
of the developing economies.
 This study will attempt to bridge the gap of level of
governance in each bank to the stakeholders and banks.
 Build stakeholders confidence .
 Access to cheap financing for banks.

12.  Poor corporate governance may contribute to bank failures,
which can increase public costs.
 Poor corporate governance can also lead to a liquidity crisis.
 The corporate governance of banks in developing economies
has been almost ignored by researchers.

13.  This study will investigate the relationship between corporate governance
and performance of private sector banks of India and Nepal.
 The choice of this sector is based on the fact that the banking sector's
stability is essential for the survival of the developing economies.
 It will consider only 5 years of financial statements (Annual reports).
 The study period is limited to 2-5 years.
 It will focus only on listed new private sector banks of India.
 It will focus only on listed private sector banks of Nepal.

14.  The methods will be employed for data analysis and measurement which
include –
 Research Population- All Private Sector Banks - 5 years.(2010-2015).
 Types and Sources of Data –
 Primary-Interview and Questionnaire
 Secondary- Annual reports, Financial Statements.

15. Method of Data Presentation
•Data gathered from the annual reports of the sampled banks will be presented
in tabular forms.
•The secondary data will be analyzed-
• To quantify the quality of the different component of corporate
governance.
•And also the overall corporate governance in order to identify the
relationship among them and their impact on the banks performance.
•The primary data will be analyzed:
•To identify the viewpoint of the executive officers and senior managers on
the impact of corporate governance on the banks performance.
•To examine the level of Financial Literacy of Directors.

16.  Data will be analyze through the computing software like SPSS, EXCEL,
etc.
 Ratios:
◦ ROA, ROE, Non performing loan and Tobin’s Q Ratio.
 Descriptive Analysis
◦ Central Tendency and Dispersion

17. Analytic Tools, Techniques and
Technologies (TTT)
• Correlation between Variables
• Hypotheses Testing (T-Test and Anova)
• Ordinary least squares (OLS) regression analysis
• Inferential Analysis
• Content Analysis
 CGD Index

18. Any Feedback?

19. Thank You!!!