As per BCBS principles (October 2010) for enhancing corporate governance, effective corporate governance practices are essential to achieve and maintain public trust and confidence in the banking system, which are critical to the proper functioning of the banking sector and economy as a whole.
The above arguments apply to the NBFC sector also, especially, in view of their growing size, multiplicity of stakeholders and the increasing complexity of operations. For the purposes of corporate governance, we have felt it necessary to increase the focus on companies with asset size of more than ₹ 10 billion, i.e., the really large companies.