ICRA reaffirms CGR2 ratings to BoB`s CG practices
ICRA reaffirms CGR2 ratings to BoB`s CG practices Leading credit rating agency, ICRA reaffirmed the CGR2 rating assigned to the corporate governance (CG) practices of Bank of Baroda (Q, N,C,F)* (BoB). This is on a rating scale of CGR1 to CGR6 where CGR1 denotes the highest rating. The CGR2 rating implies that in ICRA`s current opinion the rated bank has adopted and follows such practices, conventions and codes as would provide its financial stakeholders a high level of assurance on the quality of corporate governance.
>The rating reflects BoB`s transparent ownership structure, well-defined delegation of power and accountability, satisfactory risk management practices and an elaborate audit function, carried out both by its inspection division and by independent audit firms. The oversight function played by the board in the area of monitoring performance, ensuring adherence to internal control procedures and adoption of risk management practices as per the guidelines laid down by the Reserve Bank of India (RBI).
The rating also favourably factors in the continuing regulatory emphasis and surveillance to improve upon the governance practices and processes at ban ks.
ICRA has taken note of the progress made by the bank in strengthening its credit risk and market risk management functions. However, in the light of applicability of Basel II norms by the end of fiscal 2008, in ICRA`s opinion, the bank still has some way to go in terms of putting in place systems and procedures for quantifying its credit, market and operational risks. Further, in ICRA`s opinion, BoB has scope for improvement in adopting the A.S Ganguly Committee recommendations with respect to the functioning of a bank`s board of directors.
Shares of the bank gained Rs 1.3, or 0.46%, to settle at Rs 284.3. The total volume of shares traded was 359,601 at the BSE. (Friday)
