Failure of the Legal Framework Governing Corporate Governance in India: A Critical Study

Transparency, accountability, and ethical behaviour in banks and other companies can only be made possible under corporate governance. However, over the past years, the Indian banking industry has been struck by some massive fraud cases which expose massive lapses of such governance systems. The Punjab National Bank scandal, loan default of Vijay Mallya and the Nirav Modi case highlight the weaknesses in the internal controls, the regulatory control and corporate responsibility. These incidences have destroyed the confidence of the citizens and incurred huge losses to the banks and economy. The paper addresses the legal aspects of the relationship between corporate governance failures and banking frauds in India and examines the current regulatory landscape that has implemented the Companies Act 2013, the Banking Regulations Act 1949, and the work of the Reserve Bank of India, including the Companies Act 2013, Banking Regulation Act 1949, RBI Act 1934, FEMA 1999, Prevention of Money Laundering Act 2002, and enforcement role of SFIO, ED and SEBI.” and determine the lapses in the banking practices and how this could be improved to enhance accountability and deter financial abuse.