The latest business environment is being bustled around the concept of Corporate Governance. All credit to liberalization and globalization that have led to the resurgence of the concept of Corporate Governance across the globe. It is based on the dictum of accountability, transparency, responsibility, fairness, risk management and quality. Banking as is different from other forms of business has commonly been treated as a matter of public interest given its overall significance and far-reaching repercussions on the economy both in regard to its linkages with the primary sector and for providing a payments and settlement system. The sustained initiatives embarked upon by the Reserve Bank of India and the government to ameliorate the notion of governance in banking sector cannot be said to be ineffective but its efficacy is still shrouded with question mark. This paper critically examines the existing governance practices in the banks throughout the country in the light of the financial status of the banks in recent past, elaborating on the issues of governance in banks and the consequences the banks are facing because of poor corporate governance in the banking sectors. It also analyses the feasibility of the existing legal framework and the effectiveness of the actions taken in respect to governance by the regulatory authorities.