In the case of private sector banks where promoter directors may act in concert, the independent/non-executive directors should provide effective checks and balances ensuring that the bank does not build up exposures to entities connected with the promoters or their associates. The independent/non-executive directors should provide effective checks and balances particularly, in widely held and closely controlled banking organizations.
This is because more than half of all loans to households are loans for house purchase. [1] At 80%, real estate makes up the lion’s share of fixed assets in Germany. Our assessment of the real estate market situation is similar to that of last year: cyclical risks, to which the real estate market is making a significant contribution, are continuing to mount.