"Corporate Governance Mechanisms and Financial Performance: A Comparative Study of Public and Private Sector Banks in India"

Abstract Corporate governance plays a crucial role in ensuring transparency, accountability, andsustainable performance in banking institutions. In the Indian context, the banking sector ischaracterized by structural differences between public sector banks and private sector banks,particularly in terms of ownership, governance practices, and operational efficiency. Thisstudy examines the impact of corporate governance mechanisms on the financial performanceof selected public and private sector banks in India during the period 2019–2023. The studyemploys a quantitative and comparative research design using secondary data collected frompublished financial statements, regulatory reports, and governance disclosures. Corporategovernance variables considered include board independence, board size, gender diversity onthe board, and CEO duality, while financial performance is measured using Return on Assets(ROA), Return on Equity (ROE), Gross Non-Performing Assets (GNPA), Net Interest Margin(NIM), and Capital Adequacy Ratio (CAR). Statistical tools such as descriptive analysis,independent samples t-test, correlation analysis, and multiple regression models are appliedusing SPSS to test the proposed hypotheses. The results reveal significant differences ingovernance structures and financial performance between public and private sector banks,with private banks exhibiting superior profitability, asset quality, and governanceeffectiveness. Regression results indicate that board independence and gender diversity havea positive and significant influence on financial performance, whereas CEO duality negativelyaffects bank performance. The study concludes that strong corporate governance mechanismsare vital for improving financial efficiency and risk management in the banking sector,particularly for public sector banks. The findings offer valuable insights for regulators,policymakers, and bank management in strengthening governance frameworks to enhancelong-term financial stability and performance.