Analyzing corporate disclosure in Indian banks: assessing compliance, corporate attributes, and performance implications

Vasantha, Naveenan Ramaian; Ooi Kok Loang; Iqbal, Najaf; Suresh G; Shah, Mohd Asif Article Analyzing corporate disclosure in Indian banks: assessing compliance, corporate attributes, and performance implications Cogent Economics & Finance Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Vasantha, Naveenan Ramaian; Ooi Kok Loang; Iqbal, Najaf; Suresh G; Shah, Mohd Asif (2024) : Analyzing corporate disclosure in Indian banks: assessing compliance, corporate attributes, and performance implications, Cogent Economics & Finance, ISSN 2332-2039, Taylor & Francis, Abingdon, Vol. 12, Iss. 1, pp. 1-17, https://doi.org/10.1080/23322039.2023.2297589 This Version is available at: https://hdl.handle.net/10419/321398 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Cogent Economics & Finance ISSN: 2332-2039 (Online) Journal homepage: www.tandfonline.com/journals/oaef20 Analyzing corporate disclosure in Indian banks: assessing compliance, corporate attributes, and performance implications Naveenan R. V, Ooi Kok Loang, Najaf Iqbal, Suresh G & Mohd Asif Shah To cite this article: Naveenan R. V, Ooi Kok Loang, Najaf Iqbal, Suresh G & Mohd Asif Shah (2024) Analyzing corporate disclosure in Indian banks: assessing compliance, corporate attributes, and performance implications, Cogent Economics & Finance, 12:1, 2297589, DOI: 10.1080/23322039.2023.2297589 To link to this article: https://doi.org/10.1080/23322039.2023.2297589 © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. Published online: 18 Jan 2024. Submit your article to this journal Article views: 1717 View related articles View Crossmark data Citing articles: 7 View citing articles Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oaef20 GENERAL & APPLIED ECONOMICS | RESEARCH ARTICLE Analyzing corporate disclosure in Indian banks: assessing compliance, corporate attributes, and performance implications Naveenan R. V a , Ooi Kok Loang b , Najaf Iqbal c , Suresh G a and Mohd Asif Shah d,e a Symbiosis Institute of Business ManagementBengaluru (SIBM-B), Symbiosis International University (SIU), Bengaluru, India; b City University Malaysia, City Graduate School, Petaling Jaya, Malaysia; c CIMA Centre, School of Accounting, Wuhan College, Wuhan, China; d Department of Economics, College of Business and Economics, Kabridahar University, Ethiopia; e University Centre for Research & Development, University School of Business, Chandigarh University, Punjab, India ABSTRACT Corporate disclosure is critical for many stakeholders to make the best decisions possible. Corporate disclosure practices may vary based on corporate attributes. This study focuses on analyzing the influence of corporate attributes on disclosure. We developed a disclosure index using the unweighted disclosure index method for Indian banks. The disclosure index is developed based on data collected from the annual reports covering 2011-2020. The panel regression model examined corporate attributes’impact on disclosure practices, and the results reveal that corporate attributes significantly influence the disclosure practices of banks. The Disclosure index will help us understand disclosure compliance and the impact of corporate attributes on disclosure. This study reiterates that banks should be transparent and understand the relevance of corporate attributes and information disclosure. It advocates the importance of corporate disclosure, which helps practitioners and policymakers gain the trust of stakeholders, translating into business opportunities and reflecting on the bank’s performance. ARTICLE HISTORY Received 4 July 2023 Revised 21 November 2023 Accepted 16 December 2023 KEYWORDS Corporate attributes; accounting information; disclosure; banks; India REVIEWING EDITOR Mohammed M. Elgammal, Qatar University, QATAR SUBJECTS Finance; Banking; Business, Management and Accounting; Corporate Governance JEL CLASSIFICATION F00, F37, G10, G20 1. Introduction Corporate governance and disclosure have long been a subject of interest for researchers and policymakers regarding corporate governance policies. The financial crisis of 2007–2008 sent shockwaves through global economies, bringing corporate governance practices and regulations into the spotlight, particularly in developed nations (Omoteso & Yusuf, 2017). Further catastrophic failures of firms like Enron, Silicon Valley Bank, Parmalat, etc. emphasized the importance of governance and disclosure practices among policymakers worldwide. This highlights the significance of financial statement analysis in evaluating a firm’s performance. Evaluation of a company’s performance is necessary to understand its operational efficiency. Financial and disclosure statements help investors understand the bank’s competitiveness and aid stakeholders in investment decision-making (Almaqtari et al., 2022). Events such as the global economic recession (2007–2009) raised global concerns about global governance issues, thus drawing policymakers’attention worldwide. CONTACT Mohd Asif Shah [email protected] Department of Economics, College of Business and Economics, Kabridahar University, Ethiopia ß2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent. COGENT ECONOMICS & FINANCE 2024, VOL. 12, NO. 1, 2297589 https://doi.org/10.1080/23322039.2023.2297589 These deliberations clarify that banking is a key player in financial market sustainability and economic growth (Chen et al., 2018). Efficient banks fuel economic development, while bank failures can impede a nation’s development (Noh et al., 2019). Financially strong banks enhance economic prosperity and encourage investments, stimulating economic growth (Ahmed, 2021). Literature also supports that the soundness of the banking system is intrinsically linked to a nation’s economic well-being (Das, 2022). Non-adherence of banks to CG norms will make them susceptible to systemic risk and challenge their growth and survival (Gulati et al., 2020). Therefore, countries worldwide must adopt exemplary corporate governance practices integrating risk management, transparency, and stakeholder involvement (Omoteso & Yusuf, 2017). Banks with poor corporate governance practices are vulnerable to systemic shocks (Ahmed, 2021). Stakeholders need help obtaining banks’corporate performance information, and policymakers need help making the system transparent (Cheynel & Levine, 2020). The financial disclosure awareness will improve through adequate reforms and increasing pressure from policymakers and other stakeholders for greater accountability (Noh et al., 2019). The level of disclosure required for commercial bank management has begun to gain prominence on an international scale. International organizations have urged banks worldwide to comply with disclosure requirements based on applicable laws Korca et al. (2021). The primary goal of disclosure standards is to ensure appropriate communication, reliability, and material information, which will serve the purpose for which stakeholders rely on annual reports. It instills confidence among the stakeholders and helps them make informed decisions, making banking more trustworthy Suwaidan et al. (2021). We developed a corporate disclosure index to measure transparency and study the abovementioned relationship. This index can guide stakeholders and policymakers in assessing governance standards Gulati et al. (2020). This index simplifies interpretation, enabling benchmarking and policy analysis and helping policymakers evaluate governance reforms’ effectiveness (Uzma, 2018). This research focuses on bridging the disclosure gap in India’s banking sector. It is also critical to recognize that non-financial information disclosure has improved over time (Korca et al., 2021). However, has the disclosure culture reached an acceptable level? is a pertinent question. Numerous studies (Al-Homaidi et al., 2020; Chen et al., 2018; Korca et al., 2021; Noh et al., 2019; Warrad & Khaddam, 2020) have been conducted on various aspects of financial reporting. However, no such study on disclosure concerning banks in emerging nations exists. Further, the legal boundaries and cultural diversity make emerging economies different from developed economies regarding corporate governance (Yilmaz et al., 2023). Understanding the various challenges and variations in the country’s practices is crucial in understanding the governance practice. This article aims to comprehensively analyze the country’s unique aspects and how they can influence the study of disclosure and corporate governance. This will help us understand how well the disclosure practices in Indian banks align with international disclosure practices. We also understand a significant positive relationship between corporate disclosure and corporate attributes such as profitability, exposure level, and financial performance (Kaur & Vij, 2018). As per (Ahmed, 2021), there is no noteworthy association between the level of disclosure and business characteristics in China’s top five banks, the world’s largest banks. However, the research doubts whether this would hold for banks in emerging economies like India. As a result, this study will assist us in reconfirming the relationship between corporate disclosure and corporate characteristics. This would also establish a foundation for comprehending and quantifying the disclosure of India’s publicly traded banks’financial information, thereby elucidating the underlying corporate reporting and disclosure issues, which require a complete examination. Additionally, this research establishes a foundation for comprehending the extent of corporate transparency in India, the information supremacy of the banks, and the type of corporate reporting in the Indian banks. Thus, such a study can provide policymakers with further insight and contribute to the literature. We include select listed Indian banks and cover annual reports from 2011–2020. The study examines corporate information disclosure and analyses the connection between banks’disclosure scores and corporate attributes. Comprehensive studies on corporate disclosure in emerging Asian countries, particularly Indian banks, are lacking. Very few studies have focused on the above points, and no study has conducted the same research from the perspective of Indian Banks to the best of our knowledge. This study, therefore, covers 2 R. V. NAVEENAN ET AL. the research gap in reporting and will aid the Government in ensuring better corporate reporting in the Indian Banking Sector, which is on par with international best reporting practices. The following points explain the rationality of choosing India as the study area: First, the literature focusing on corporate disclosure in India is scarce (Sharma & Rastogi, 2021). This study will add knowledge on voluntary disclosure in Indian banks and thus help bridge the gap. Second, the global CG practices in developed countries differ from those of emerging countries because of different legal frameworks and cultural settings in various countries Korca et al. (2021). So, the countrybased study primarily focuses on emerging economies like India’s significance. Third, India has recently introduced various norms and disclosure guidelines for better corporate governance, but weak implementation has led to poor compliance by Indian companies (Uzma, 2018). So, this study will help us understand the level of compliance in the Indian Banking industry. The remainder of this paper is organized as follows. Section 2 highlights the literature, which gives us a theoretical perspective of the research gap and the significance of the research. The research methodology is discussed in section 3. The results and discussion are presented in section 4,and finally, the conclusion, theoretical and practical implications, and Limitations of the research are discussed in section 5. 2. Literature review Over the two decades, many scholars have studied the various dimensions of corporate governance and its impact on corporate attributes. The significance of the board of directors in the smooth functioning of business, ensuring the interest of stakeholders, diversity in the board, the responsibility of the board of directors, accountability, transparency, disclosure, and financial and risk reporting have been the research topics of eminent scholars worldwide. Kusi et al. (2018) reported that weak corporate governance negatively influences the stakeholder’s value. Further, the recent financial crisis of 2008–2009 was at least partly the outcome of poor corporate governance (Oino, 2019). Therefore, in the present information-based world, stakeholders are very keen to know the corporate governance practices of companies (Zimik & Suresh, 2021). Hence, corporations must adhere to and disclose good governance practices to the various stakeholders. In a study, Akuffo (2020) advocates that events like the financial crisis of 2008–2009 governance practices, including financial disclosures, attract attention from stakeholders. Transparency and the disclosure of financial and non-financial reports, including risk exposure, are considered essential elements of corporate governance (Henry, 2008). These financial reports are important because they provide crucial and reliable information to stakeholders. These reports enable informed decisions by understanding the company’s performance, present status, and prospects (Adegboyegun et al., 2020). Countries worldwide have corporate disclosure regulations to protect the stakeholders’interests. At the same time, it is necessary to examine how the corporations respond to it, as the reporting practices of these corporations are of absolute importance (Goel, 2018). Corporate disclosure of accounting information is a standard practice in developed nations like the USA and UK, but only in some developing countries. Corporate Governance reforms and disclosure practices vary from country to country because of varied political, social, and economic factors. A study favored that governance and disclosure practices vary because of cultural traits, degree of substitution, company-level governance practices (Filatotchev et al., 2013), market forces (Lattemann, 2014), political, economic and legal environment differences among the countries (Jacoby et al., 2019). On the contrary, Wang et al. (2008) found no correlation between voluntary disclosure and lower debt capital costs. Additionally, (Lo & Wong, 2011) examine the significant impact of ownership structure, earnings management, board composition, and incentive structures on accounting disclosure decisions. Hence, it is necessary to examine corporate governance, particularly disclosure practices in emerging economies like India As a highly regulated industry, the Corporate disclosure practices of banks are unique (Adams & Mehran, 2003). Further, Gillan et al. (2003) advocated that the corporate governance structure and disclosure practices differ systematically across industries due to internal and external factors. Hence, studying industry-specific corporate governance and disclosure practices is essential. Banks are an economic COGENT ECONOMICS & FINANCE 3 fuel for any country, and stability and good governance are supreme factors in gaining and maintaining the trust of the various stakeholders. Further failure of a financial institution may lead to uncertainty and affect the financial system. Therefore, a particular focus on the bank’s corporate governance and disclosure practices should be required. Failure in Indian ICICI Banks has again reiterated the importance of disclosure practices of banks. Hence, the policymakers and regulators are focused more on corporate governance and disclosure practices of banks. Many banks worldwide started to disclose corporate governance practices to attract the attention of various stakeholders. A study by Cheung et al. (2010) evaluated 100 businesses in China using OECD principles and discovered that Chinese firms reward investors for accounting disclosure transparency, implying that favorable capital market outcomes influence Chinese firms’accounting disclosure decisions. India is focusing on a more transparent and accountable financial system, and thus, CG reforms (Refer to Table 1) play a significant role in achieving this objective. India has several legislations that promote good governance practices in Indian companies, especially in Banks (Uzma, 2018). Even before these corporate governance reforms, many banks in India and around the world have practiced the disclosure of both financial and non-financial reports voluntarily. Numerous studies (Al-Homaidi et al., 2020; Almaqtari et al., 2022; Lo & Wong, 2011) examined the impact of corporate attributes on voluntary disclosure practices. Further, some studies (Almaqtari et al., 2022; Kusi et al., 2018; Loang, 2022; Warrad & Khaddam, 2020) investigated the qualitative aspects of CG in banking companies and found that the corporate attributes have a strong influence on governance disclosure. Notably, most studies focused on the impact of CG and disclosure on corporate attributes, but very few studies have concentrated on how corporate attributes influence corporate disclosure. Some previous studies advocate that the extensive, financial, non-financial information and risk exposure disclosure Table 1. Banking governance reforms in india. Regulation/Acts Implemented by Period of Implementation Purpose Literature Section 35 A of the Banking Regulation Act 1949. Reserve Bank of India (RBI) 1949 It gives RBI the power to regulate banks. (Das, 2022; Saldanha & Aranha, 2021) SEBI Act 1992 and Clause 49, 2006. Securities and Exchange Board of India (SEBI) 1992 and 2006 Guidelines on Corporate Governance. (Singla & Singh, 2018; Uzma, 2018) Code of Corporate Governance 1998, Clause 49. Confederation of Indian Industries (CII) 1998 Improve governance practices and disclosures in all the listed companies. (Srivastava et al., 2018; Uzma, 2018) Corporate Governance Act 1999 Kumar Mangalam Birla Committee 1999 Introduced the principal need to build a governance landscape in India (Singla & Singh, 2018; Uzma, 2018) Corporate Audit and Governance 2002 Naresh Chandra Committee Report 2002 Recommendation on Corporate Audit and Governance (Srivastava et al., 2018) Committee on Corporate Governance by SEBI, 2003 Narayana Murthy Committee 2003 Evaluate and improve the existing corporate governance practices. (Srivastava et al., 2018) Dr Jamshed J. Irani Report (2005). Ministry of Corporate Affairs, Government of India. 2005 Recommendations on addressing the concerns of stakeholders. (Hanrahan & Hargovan, 2020; Srivastava et al., 2018) The Companies Bill, 2009 Ministry of Corporate Affairs, Government of India. 2009 Enables greater shareholder involvement, stringent norms of CG, and additionally, pronounced corporate social responsibility (CSR) initiatives for companies (Uzma, 2018, Hanrahan & Hargovan, 2020) The Takeover Code, 2011. Securities and Exchange Board of India (SEBI) 2011 Increase the measure of transparency and governance (Naik et al., 2014; Uzma, 2018) The Companies Act (2013) Ministry of Company Affairs (MCA) 2013 Regulates Institutions/ firms in India. (Bag & Omrane, 2022; Naik et al., 2014) Establishment of the Bank Boards Bureau Government of India. 2016 To improve governance in public sector banks. (Uzma, 2018; Naik et al., 2014) 4 R. V. NAVEENAN ET AL. practices are an additional cost to the corporates and irrelevant to corporate attributes performance (Li et al., 2017; Smith et al., 2007). However, Waddock and Graves (1997) argue that a relationship exists between corporate attributes and firms’disclosure practices. Furthermore, recently Suwaidan et al. (2021) examined how corporate characteristics influence mandatory corporate disclosure and found that corporate attributes such as corporate size, profitability, ownership structure, and company age affiliations significantly influence the disclosure practices of multinational corporations. Furthermore, Uyar and Kilic (2012) examined the degree to which accounting information is disclosed and the drivers that influence disclosure in listed Turkish corporations. The study discovered that attributes such as listing age, profitability, independent directors, leverage, and ownership structure have a negligible effect, and firm size significantly affects disclosure practices. These results complement the findings of Ahmed (2021), who studied the relationship between corporate attributes and accounting disclosure practices of Chinese banks. Similarly, Bhaumik et al. (2019) mentioned in their study that corporate governance and disclosure practices in developing economies affect profitability and leverage. Similarly, Wang (2016) investigated the relationship between corporate attributes and voluntary disclosure practices in Bangladesh banks and identified that disclosure is positively related to performance measured by ROE. Another piece of evidence is shown in the study of Al-Homaidi et al. (2020), in which they examined Islamic banks in Yemen and explained the association between corporate governance and CAR. Based on the above discussions, there are no conclusive results on the impact of corporate attributes on disclosure practices. The literature on this domain provides mixed results, as the literature is ambiguous and contradictory. It is critical to recognize that banks’disclosure policies and governance difficulties are distinct from those of non-banking enterprises. This is primarily due to knowledge asymmetry, moral hazard problems, cultural diversity, legal structure, and the opaque nature of banking. Nevertheless, the literature on this domain established that the relationship between corporate attributes and disclosure practices among banks, particularly in the emerging economy context, has been primarily ignored by researchers (Bozec & Bozec, 2012; Gulati et al., 2020). Therefore, considering this significant research gap, this study aims to investigate the impact of corporate attributes on accounting disclosure within the context of Indian banks. Investors look for pertinent and reliable accounting data to make rational decisions. A composite index of Corporate Disclosure compresses the range of financial and non-financial indicators into a single numerical score, making interpretation easier. It is a valuable tool for benchmarking banks and enabling effective policy analysis. 3. Research methodology 3.1. Research question India is one of the fastest-developing Asian nations. The Government introduced the Companies Bill in 2009, and the Stock Exchange Board of India introduced the Takeover Code in 2011 to improve banks’ and listed companies’transparency and governance, respectively. These legal environments made it mandatory for banks to disclose accounting information to the stakeholders. However, the findings from the literature could be more specific and specific. As mentioned in the literature section, significant studies in this domain concentrated on developed and non-banking companies, but only a few concentrated on developing countries like India. So, in this study, we focus on listed Indian banks whose annual reports for the study period are available for 2011-2020 is available. Studies indicate an association between corporate characteristics and the degree of compulsory disclosure (Suwaidan et al., 2021). The study’s primary focus is understanding corporate attributes’impact on disclosure scores. So, the primary research question is: Do corporate attributes have a significant impact on disclosure scores? 3.2. Sampling In the year 2009, the Indian Government introduced the Companies Bill 2009, which emphasized more on CG. Hence, all the Indian companies, including banking companies, were forced to follow the COGENT ECONOMICS & FINANCE 5 corporate governance policy. From this year, corporate governance practices were expected to improve. Hence, the study period is from 2010-2020. The study units are selected based on two criteria: firstly, banks should be listed throughout the study period, and secondly, annual reports should be available covering the study period. Table 2 presents the sample banks. Fortunately, the sample covers banks of high and low market capitalization from private and public sectors. Since the study is related to the significance of corporate attributes on governance practices, market capitalization plays a pivotal role. Since the sample covers the highest and lowest market capitalization banks, the study’s findings are expected to be helpful to policymakers, Stock exchange regulators, and other stakeholders. 3.3. Variables The response variable for the study is corporate disclosure, and the explanatory variable is Corporate attributes. Based on the Literature review, we have selected significant corporate attribute variables relevant to the banking industry. Table 3 presents the details of the selected variables: 3.4. Disclosure index development The banking regulator (RBI) has issued directions on disclosure parameters to ensure financial stability and stakeholders’interest. The disclosure index was used to elicit information about banks’disclosure in annual reports to ascertain the disclosure score of banks. Table 4 shows the disclosure parameter used in the construction of the index. 3.4.1. Indexing method Numerous methods used in index creation studies, including UDI, PCA analysis, and MCDM methods like Entropy Weight Method, AHP, etc., are used to develop disclosure index. Among the methods available, Table 2. Details of Banks. Sr.No Bank Category/Sector Markt Capitalisation (Rs.) S-1 HDFC Bank Private 8,11,033.41 S-2 ICICI Bank Private 5,42,442.58 S-3 State Bank of India Public 4,67,158.79 S-4 Kotak Mahendra Bank Private 3,77,053.73 S-5 Axis Bank Private 2,34,596.58 S-6 Indus Ind Bank Private 69,989.60 S-7 Bank of Baroda Public 53,420.17 S-8 IDBI Bank Public 52,149.15 S-9 Punjab National Bank Public 44,980.00 S-10 Canara Bank Public 43,339.57 S-11 Indian Overseas Bank Public 40,073.11 S-12 Yes Bank Private 33,448.30 S-13 Union Bank of India Public 32,157.49 S-14 Bank of India Public 22,672.20 S-15 Indian Bank Public 18,694.07 Table 3. Variables of the study. Variable Symbol Data Specification Reference Dependent Variable Disclosure Score DS Calculated based on information in annual reports. Independent Variables Return on Asset ROA PAT Total Assets (Kaur & Vij, 2018) Return on equity ROE PAT Total Assets Shareholder0sEquity (Warrad & Khaddam, 2020) Capital Adequacy Ratio CAR Tier 1capitalþTier 2capital Risk Weighted Assets (Al-Homaidi et al., 2020) Loan to Deposit Ratio LTD Total Loan Total Deposit (Ahmed, 2021) Dividend Pay-out Ratio DPR Dividend Per Share Earnings Per Share (Kanojia & Bhatia, 2022) Debt Equity Ratio DER Long−Term Debt Equity Shareholder0s Fund (Kaur & Vij, 2018) Cost to Income Ratio CIR Operating Cost Operating Revenue (Ahmed, 2021) Control Variables Bank Size Size ln PTotal Assets (Al-Homaidi et al., 2020) Bank Age Age No. of years since inception (Al-Homaidi et al., 2020) 6 R. V. NAVEENAN ET AL. Table 4. Disclosure parameters. No Parameter Classification 1.1 CAR (%) Capital 1.2 CRAR - Tier I Capital (%) 1.3 CRAR - Tier II Capital (%) 1.4 Percentage of the shareholding of the Government of India in nationalized banks 1.5 Amount raised by the issue of IPDI 1.6 Amount raised by the issue of Upper Tier II instruments 2.1 Value of Investments Investments 2.2 Movement of provisions held towards depreciation on investments 3.1 Securities sold under repos Repo Transactions 3.2 Securities purchased under reverse repos 4.1 Issuer composition of Non-SLR investments Non-SLR Investment Portfolio 4.2 Non-performing non-SLR investments 5.1 Forward Rate Agreement/ Interest Rate Swap Derivatives 5.2 Exchange Traded Interest Rate Derivatives 5.3 Disclosures on risk exposure in derivatives 6.1 Non-Performing Assets Asset Quality 6.2 Particulars of Accounts Restructured 6.3 Details of financial assets sold to Securitisation/Reconstruction Company for Asset Reconstruction 6.4 Details of non-performing financial assets purchased/sold 6.5 Provisions on Standard Assets 7.1 Interest Income as a percentage of Working Funds $ Business Ratios 7.2 Non-interest income as a percentage of Working Funds 7.3 Operating Profit as a Percentage of Working Funds $ 7.4 Return on Assets 7.5 Business (Deposits plus advances) per employee #(Rs.in crore) 7.6 Profit per employee (Rs. in crore) 8 Asset Liability Management Maturity pattern of certain items of assets and liabilities Asset Liability Management 9.1 Exposure to the Real Estate Sector Exposures 9.2 Exposure to Capital Market 9.3 Risk Category-wise Country Exposure 9.4 Details of Single Borrower Limit (SGL)/ Group Borrower Limit (GBL) exceeded by the bank. 9.5 Unsecured Advances 10.1 Amount of Provisions made for Income-tax during the year-Provision for Income Tax Miscellaneous 10.2 Disclosure of Penalties imposed by RBI 11.1 Accounting Standard 5 –Net Profit or Loss for the period, prior period items, and changes in accounting policies. Additional Disclosure Requirements as per RBI 11.2 Accounting Standard 9 –Revenue Recognition 11.3 Accounting Standard 15 –Employee Benefits 11.4 Accounting Standard 17 –Segment Reporting 11.5 Accounting Standard 18 –Related Party Disclosures 11.6 Accounting Standard 21 –Consolidated Financial Statements (CFS) 11.7 Accounting Standard 22 –Accounting for Taxes on Income 11.8 Accounting Standard 23 –Accounting for Investments in Associates in Consolidated Financial Statements 11.9 Accounting Standard 24 –Discontinuing Operations (continued) COGENT ECONOMICS & FINANCE 7 policymakers and bank management by emphasizing the need for region-specific approaches in improving disclosure practices. 5.1. Theoretical implications Our study has various theoretical implications. To begin with, our study creates an improved understanding of corporate disclosure and its compliance trend in Indian banks. The disclosure index created in this study is specific to the Indian banking sector and thus contributes to the bank disclosure measurement theory. The findings act as a benchmark for banks to evaluate the disclosure practice in Indian banks and create scope to benchmark Indian banks with international best practices. The novelty of this study is that we have analyzed the association between disclosure and corporate attributes in banks of an emerging Indian economy. The study results will encourage the bank management to be transparent, as they understand the relevance of corporate attributes and information disclosure. The study provides a scope for understanding disclosure practices in developing economies like India and helps researchers and policymakers understand the disclosure landscape in emerging economies. Our study introduces a multidimensional model that integrates a variety of corporate attributes such as ROA, ROE, CAR, LTD, DPR, DER, and CIR. This approach improves the theoretical framework by considering a broader spectrum of factors influencing disclosure. 5.2. Practical implications The study results provide numerous insights to the stakeholders. Firstly, customers can choose the banking services based on the disclosure scores of the banks. Better disclosure scores indicate superior corporate governance and transparency. Secondly, investors can reconfirm the reliability of the bank’s performance metrics based on the disclosure scores. Better disclosure scores indicate a lesser chance of window dressing. Thirdly, our study provides insights into the importance of disclosure compliance and thus encourages the bank’s management to work toward better compliance and transparency. Finally, policymakers should make adequate efforts to educate the banks about the importance and benefits of corporate disclosure. Policymakers should also review the efficiency of existing reforms and take corrective actions if required. Investors can leverage this insight to more comprehensively assess the banks they invest in. Banks with strong corporate attributes positively impacting disclosure practices may be more reliable and potentially more attractive investment options. This research becomes a foundation for policymakers in understanding corporate disclosure practices in Indian banks, which can serve as a foundation for developing governance regulations to ensure adherence. This will help Indian banks align their reporting practices with the world’s best practices. In addition, Regulators can complement the banks with better disclosure practices with rewards and ratings, which will encourage the banks to comply. 5.3. Limitations and future recommendations This study has a few limitations, which creates scope for further research. First, this study is based on the post-reform period, and thus, we have selected only 15 out of 34 listed banks whose annual reports are available for the specified period. Further researchers can further extend this study by analyzing more Indian banks. A comparison of a different banking system based on international CG regulations can also be considered. Second, this study is based only on Indian banks, and future researchers could consider a comparative study of different banks from multiple countries. Future researchers can also consider analyzing the relationship between DS and other corporate attributes and CG attributes. The findings can serve as a valuable baseline for future research in financial inclusion, banking practices, and corporate disclosure in the Indian context. Researchers can build upon this data to investigate evolving trends and dynamics. 14 R. V. NAVEENAN ET AL. Disclosure statement No potential conflict of interest was reported by the author(s). About the author Mohd Asif Shah is currently working as an Associate Professor at Kabridahar University, Ethiopia. He has published more than hundred research papers, which are indexed in Scopus, and Web of Science Indexed Journals. Having more than ten years of teaching experience, he has been a popular instructor. His courses always fill up quickly as students enjoy his teaching style. He tries to deliver the information in a fun and interesting manner to aid students’grasp of the material and hold their interest. ORCID Mohd Asif Shah http://orcid.org/0000-0002-0351-9559 References Adams, R., & Mehran, H. (2003). Is corporate governance different for bank-holding companies? Economic Policy Review,9(1), 123–142. Adegboyegun, A. E., Alade, M. E., Ben-Caleb, E., Ademola, A. O., Eluyela, D. F., & Oladipo, O. A. (2020). Integrated reporting and corporate performance in Nigeria: Evidence from the banking industry. Cogent Business & Management,7(1), 1736866. https://doi.org/10.1080/23311975.2020.1736866 Ahmed, A. A. A. (2021). Corporate attributes and disclosure of accounting information: Evidence from the big five banks of China. Journal of Public Affairs,21(3), 2244. https://doi.org/10.1002/pa.2244 Akuffo, J. A. (2020). The inside Scoop—What stakeholders think of corporate governance in financial institutions. Palgrave Studies in Accounting and Finance Practice. Palgrave Macmillan, Cham. 279–314. https://doi.org/10.1007/ 978-3-030-64046-0_9 Al-Homaidi, E. A., Tabash, M. I., & Ahmad, A. (2020). The profitability of Islamic banks and voluntary disclosure: empirical insights from Yemen. Cogent Economics & Finance,8(1), 1778406. https://doi.org/10.1080/23322039.2020. 1778406 Almaqtari, F. A., Hashid, A., Farhan, N. H. S., Tabash, M. I., & Al-ahdal, W. M. (2022). An empirical examination of the impact of country-level corporate governance on profitability of Indian banks. International Journal of Finance & Economics,27(2), 1912–1932. https://doi.org/10.1002/ijfe.2250 Bag, S., & Omrane, A. (2022). Corporate social responsibility and its overall effects on financial performance: Empirical evidence from Indian Companies. Journal of African Business,23(1), 264–280. https://doi.org/10.1080/ 15228916.2020.1826884 Baltagi, B. (2005). Econometric analysis of panel data. In Vasa. Bhaumik, S., Driffield, N., Gaur, A., Mickiewicz, T., & Vaaler, P. (2019). Corporate governance and MNE strategies in emerging economies. Journal of World Business,54(4), 234–243. https://doi.org/10.1016/j.jwb.2019.03.004 Bozec, R., & Bozec, Y. (2012). The use of governance indexes in the governance-performance relationship literature: International evidence. Canadian Journal of Administrative Sciences / Revue Canadienne Des Sciences de L’Administration,29(1), 79–98. https://doi.org/10.1002/cjas.201 Chen, Y.-C., Hung, M., & Wang, Y. (2018). The effect of mandatory CSR disclosure on firm profitability and social externalities: Evidence from China. Journal of Accounting and Economics,65(1), 169–190. https://doi.org/10.1016/j. jacceco.2017.11.009 Cheung, Y.-L., Jiang, P., & Tan, W. (2010). A transparency disclosure index measuring disclosures: Chinese listed companies. Journal of Accounting and Public Policy,29(3), 259–280. https://doi.org/10.1016/j.jaccpubpol.2010.02.001 Cheynel, E., & Levine, C. B. (2020). Public disclosures and information asymmetry: A theory of the mosaic. The Accounting Review,95(1), 79–99. https://doi.org/10.2308/accr-52447 Coy, D., & Dixon, K. (2004). The public accountability index: Crafting a parametric disclosure index for annual reports. The British Accounting Review,36(1), 79–106. https://doi.org/10.1016/j.bar.2003.10.003 Das, K. (2022). Role of cooperative banks in economic developments: An empirical study of Balangir District Central Cooperative Bank, Odisha. International Academic Journal of Business Management,9(1), 01–11. https://doi.org/10. 9756/IAJBM/V9I1/IAJBM0901 COGENT ECONOMICS & FINANCE 15 Filatotchev, I., Jackson, G., & Nakajima, C. (2013). Corporate governance and national institutions: A review and emerging research agenda. Asia Pacific Journal of Management,30(4), 965–986. https://doi.org/10.1007/s10490012-9293-9 Gillan, S., Hartzell, J. C., & Starks, L. (2003). Explaining corporate governance: Board, bylaws, and charter provisions. Accessed from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=442740. Goel, P. (2018). Implications of corporate governance on financial performance: an analytical review of governance and social reporting reforms in India. Asian Journal of Sustainability and Social Responsibility,3(1), 4. https://doi. org/10.1186/s41180-018-0020-4 Gulati, R., Kattumuri, R., & Kumar, S. (2020). A non-parametric index of corporate governance in the banking industry: An application to Indian data. Socio-Economic Planning Sciences,70, 100702. https://doi.org/10.1016/j.seps.2019.03. 008 Hanrahan, P., & Hargovan, A. (2020). Legislating the concept of the independent company director: Recent Indian reforms seen through Australian eyes. Oxford University Commonwealth Law Journal,20(1), 86–114. https://doi.org/ 10.1080/14729342.2020.1773018 Henry, D. (2008). Corporate governance structure and the valuation of Australian firms: Is there value in ticking the boxes? Journal of Business Finance & Accounting,35(7-8), 912–942. https://doi.org/10.1111/j.1468-5957.2008. 02100.x Jacoby, G., Liu, M., Wang, Y., Wu, Z., & Zhang, Y. (2019). Corporate governance, external control, and environmental information transparency: Evidence from emerging markets. Journal of International Financial Markets, Institutions and Money,58, 269–283. https://doi.org/10.1016/j.intfin.2018.11.015 Kamal Hassan, M. (2012). A disclosure index to measure the extent of corporate governance reporting by UAE-listed corporations. Journal of Financial Reporting and Accounting,10(1), 4–33. https://doi.org/10.1108/ 19852511211237426 Kanojia, S., & Bhatia, B. S. (2022). Corporate governance and dividend policy of the US and Indian companies. Journal of Management and Governance,26(4), 1339–1373. https://doi.org/10.1007/s10997-021-09587-5 Kaur, M., & Vij, M. (2018). Corporate governance index and firm performance: Empirical evidence from Indian banking. Afro-Asian J. of Finance and Accounting,8(2), 190. https://doi.org/10.1504/AAJFA.2018.091065 Korca, B., Costa, E., & Farneti, F. (2021). From voluntary to mandatory non-financial disclosure following Directive 2014/95/EU: an Italian case study. Accounting in Europe,18(3), 353–377. https://doi.org/10.1080/17449480.2021. 1933113 Kusi, B. A., Gyeke-Dako, A., Agbloyor, E. K., & Darku, A. B. (2018). Does corporate governance structures promote shareholders or stakeholders value maximization? Evidence from African banks. Corporate Governance: The International Journal of Business in Society,18(2), 270–288. https://doi.org/10.1108/CG-09-2016-0177 Lattemann, C. (2014). On the convergence of corporate governance practices in emerging markets. International Journal of Emerging Markets,9(2), 316–332. https://doi.org/10.1108/IJoEM-06-2013-0093 Li, D., Zhao, Y., Sun, Y., & Yin, D. (2017). Corporate environmental performance, environmental information disclosure, and financial performance: Evidence from China. Human and Ecological Risk Assessment: An International Journal,23(2), 323–339. https://doi.org/10.1080/10807039.2016.1247256 Lo, A. W. Y., & Wong, R. M. K. (2011). An empirical study of voluntary transfer pricing disclosures in China. Journal of Accounting and Public Policy,30(6), 607–628. https://doi.org/10.1016/j.jaccpubpol.2011.08.005 Loang, O. K. (2022). Overreaction, investor sentiment, and market sentiment of COVID-19. Vision: The Journal of Business Perspective.https://doi.org/10.1177/09722629221087386 Naik, B., Shaik, R., & Jain, R. (2014). Impact of Takeover Code 2011 on M&A Scenario in India: A Study of Share Buyback as a Takeover Defense. In M. Nandakumar, S. Jharkharia, & A. Nair (Eds.), Organisational Flexibility and Competitiveness. Flexible Systems Management. Springer, New Delhi. https://doi.org/10.1007/978-81-322-1668-1_17 Noh, S., So, E. C., & Weber, J. P. (2019). Voluntary and mandatory disclosures: Do managers view them as substitutes? Journal of Accounting and Economics,68(1), 101243. https://doi.org/10.1016/j.jacceco.2019.101243 Oino, I. (2019). Do disclosure and transparency affect a bank’s financial performance? Corporate Governance: The International Journal of Business in Society,19(6), 1344–1361. https://doi.org/10.1108/CG-12-2018-0378 Omoteso, K., & Yusuf, H. (2017). Accountability of transnational corporations in the developing world: The case for an enforceable international mechanism. Critical Perspectives on International Business,13(1), 54–71. https://doi. org/10.1108/cpoib-08-2014-0040 Saldanha, A., & Aranha, R. (2021). “Good-looking step”in “bad direction”–RBI Internal Working Group proposal. Emerald Emerging Markets Case Studies,11(3), 1–14. https://doi.org/10.1108/EEMCS-12-2020-0434 Sharma, A., & Rastogi, S. (2021). Impact of efficiency on voluntary disclosure of non-banking financial company— Microfinance Institutions in India. Journal of Risk and Financial Management,14(7), 289. https://doi.org/10.3390/ jrfm14070289 Singla, M., & Singh, S. (2018). Impact of institutional set-up on the responsiveness to change in a Firm’s Governance Structure: A comparative study of public and private sector enterprises in India. Global Journal of Flexible Systems Management,19(2), 159–172. https://doi.org/10.1007/s40171-018-0185-9 Smith, M., Yahya, K., & Marzuki Amiruddin, A. (2007). Environmental disclosure and performance reporting in Malaysia. Asian Review of Accounting,15(2), 185–199. https://doi.org/10.1108/13217340710823387 16 R. V. NAVEENAN ET AL. Soundariya, G., David, T. A., & G, S. (2021). Nexus between interest rate risk and economic value of equity of banks. Global Business Review.https://doi.org/10.1177/09721509211039401 Srivastava, V., Das, N., & Pattanayak, J. K. (2018). Corporate governance: Mapping the change. International Journal of Law and Management,60(1), 19–33. https://doi.org/10.1108/IJLMA-11-2016-0100 Suresh, G., & Krishnan, A. P. (2020). Evaluating the performance of Indian banks: Eagles model approach. Finance India,34(3), 999–1024. Retrieved from https://financeindia.org/ data/2020/FI343/FI-343-Art06.pdf Suwaidan, M. S., Al-Khoury, A. F., Areiqat, A. Y., & Cherrati, S. O. (2021). The determinants of corporate governance disclosure: The case of jordan. Academy of Accounting and Financial Studies Journal,25(2). Uyar, A., & Kilic, M. (2012). Influence of corporate attributes on forward-looking information disclosure in publicly traded Turkish corporations. Procedia - Social and Behavioral Sciences,62, 244–252. https://doi.org/10.1016/j. sbspro.2012.09.039 Uzma, S. H. (2018). Corporate governance practices: global convergence and Indian perspective. Qualitative Research in Financial Markets,10(3), 285–308. https://doi.org/10.1108/QRFM-12-2016-0049 Waddock, S. A., & Graves, S. B. (1997). The corporate social performancefinancial performance link. Strategic Management Journal,18(4), 303–319. https://doi.org/10.1002/(SICI)1097-0266(199704)18:4<303::AID-SMJ869>3.3. CO;2-7 Wang, J. (2016). Literature review on the impression management in corporate information disclosure. Modern Economy,07(06), 725–731. https://doi.org/10.4236/me.2016.76076 Wang, K., O, S., & Claiborne, M. C. (2008). Determinants and consequences of voluntary disclosure in an emerging market: Evidence from China. Journal of International Accounting, Auditing and Taxation,17(1), 14–30. https://doi. org/10.1016/j.intaccaudtax.2008.01.001 Warrad, L., & Khaddam, L. (2020). The effect of corporate governance characteristics on the performance of Jordanian banks. Accounting,6(2), 117–126. https://doi.org/10.5267/j.ac.2019.12.001 Yilmaz, M. K., Hacioglu, U., Tatoglu, E., Aksoy, M., & Duran, S. (2023). Measuring the impact of board gender and cultural diversity on corporate governance and social performance: Evidence from emerging markets. Economic Research-Ekonomska Istra zivanja,36(2), 2106503. https://doi.org/10.1080/1331677X.2022.2106503 Zhang, Y., Chong, G., & Jia, R. (2020). Fair value, corporate governance, social responsibility disclosure, and banks’ performance. Review of Accounting and Finance,19(1), 30–47. https://doi.org/10.1108/RAF-01-2018-0016 Zimik, M. Y Suresh. (2021). Corporate governance practices and shareholders protection in India. Finance India,35(2), 545–562. COGENT ECONOMICS & FINANCE 17