Goverance Mechanism and Practices on Business Efficency of Urban Co Operative Banks in Karnataka

Abstract

vii newlineABSTRACT newlineGovernance challenges in cooperative banking are the major issues in banking newlinesystem. For the long run of cooperative banks it is needful of exploring the variables to newlineuphold the governance of UCBs. This study provides an opportunity to understand the newlinegovernance practices and mechanism in enhancing Cooperative Banking Business newlineEfficiency. newlineThe extensive reviews addressed the governance in various sectors and its newlineimportance in industries. Several reviews identified concentrating on public, private and newlinecommercial banks governance implication and bank performance, board diversity, structure newlineand size in banking performance. Only few states of India covered for cooperative bank newlinegovernance research like Maharashtra and Tamilnadu, a very few studies have been found newlinein Karnataka on Urban Cooperative Banking Sector. newlineThe present study focus on exploring governance mechanism and practices adopted newlineby the UCBs of Karnataka and to analyse factors leading to achieve business efficiency. newlineThe study selected internal stakeholders (UCBs Directors, Managers, Employees and staff) newlinefor inspecting cooperative governance. Internal stakeholders such as CEOs, BODs, Audit newlineCommittee and employees are considered as Respondents to analyse and measure the newlinecooperative governance. Transparency, Accountability, Responsibility, Fair practices, Risk newlineManagement, Management Efficiency, Fund Management, HRM, Change Management, newlinePolicies and Procedures, Ethical Practices and Governance Challenges are the independent newlinevariables used to study the governance mechanism of internal stakeholders. newlineSecondary data has been collected for a period of five years from 2014-2018 from newlineRBI (Urban Cooperative Bank Department) and Karnataka State Urban Cooperative Bank newlineFederation, to analyse the Financial position of the UCBs of Karnataka. newlineIt has been found from the financial analysis that UCBs need to address the newlinesensitive areas where they can increase their financial growth for long run sustainability and newlineneed to introduce competitive products and services where stakeholder s retention possible. newlineStake holders (Member s Empowerment) always prefers the innovated products and newlineservices, this makes them to loyal towards cooperative banking system (Business newlineEfficiency). newlineviii newlineThe primary data collected to analyse the Governance practices and mechanism on newlinethe business efficiency of urban cooperative banking. For this study Urban Cooperative newlineBanks of Karnataka categorized as four divisions into Bangalore, Mysore, Belgaum and newlineGulbarga. There were 262 UCBs in Karnataka excluding its branches, Out of which 158 newlineUCBs taken for the study. To measure the financial performance, percentage growth newlineanalysis, growth by division, per branch and per employee has been carried out. newlinePrimary analysis carried out with the usage of SPSS to find out the compliance level newlinefrom both Member s and officers analysis. To find out the variations of governance newlinepractices and mechanism based on demographical study Kruskal- Wallies test administered. newlineTo analyse the relationship between the governance mechanism and practices correlation newlinestudy carried out, to find out the influence of dimensions of governance mechanism and newlinepractices on business efficiency of the UCBs regression analysis administered. newlineTo find out the contribution of governance challenges in model between governance newlinemechanisms, practices, quality of the board and business efficiency regression model newlineanalysis adopted for the study. newlineFindings of the study reveal that along with innovative products, there is need of newlinemaintaining the sound internal control system to enhance managerial effectiveness and newlinemanagerial efficiencies. Adopting governance pillars for fulfilling cooperative banking newlineobjective should be prioritised. Transparency, Accountability, Responsibility, Fairness, newlineManagerial Efficiency, Human resource management, Policies and Procedures, Ethical newlinePractices, Change Management and Fund Management are crucial variables to resolve the newlinegovernance issues. Business efficiency leads to Excellency of business and even helps newlinemember s to enhance and create their investment values. The cooperative area and newlinecooperative banking sector is the future scope of research, it is suggested to implement newlineBODs assessment, 360O performance assessment sheet and governance index to circulation newlineto strengthen the cooperative governance. newlineKey words: newlineCorporate Governance, Governance practices and mechanism, UCBs, Transparency, newlineAccountability, Responsibility, Fairness, Risk Management, Ethical Practices, Fund and newlineChange Management, Policies and Procedures, Member s Empowerment, Business newlineEfficiency and Governance Challenges.