Mumbai Capital

New Bank Board Bureau to be based in Mumbai

Bank Board Bureau is headed by former Comptroller and Auditor General Vinod Rai—File photo  

The government has decided that the Bank Board Bureau (BBB), which will decide on management and board-level appointments in public sector banks, will be based in Mumbai. The move is significant because it shows the government’s intention to distance itself from the appoint process, a crucial piece of reform in public sector banking. Until now, a government-appointed search panel, typically headed by the Reserve Bank of India governor, would select chief executives of public sector banks.

“The BBB will operate from Mumbai, and that has been communicated to the members. This is an indication that the government wants to give it full autonomy in the decision-making process,” a banking industry source told The Hindu , on condition of anonymity.

The BBB, originally proposed by the PJ Nayak Committee, was proposed to review governance issues in the banking sector. It is headed by former Comptroller and Auditor General Vinod Rai. The other members of the BBB are Rupa Kudwa, former chief of CRISIL, Anil Khandelwal, former CMD of Bank of Baroda, and HN Sinor, former chief executive of the Indian Banks’ Association and the Association of Mutual Funds in India.

A deputy governor of RBI, the secretary, financial services, and the secretary, public enterprises, are ex-officio members.

Apart from appointments, the BBB will also be involved in making strategies for public sector banks and help them in raising capital. The Nayak Committee had said, “The process of board appointments, including appointments of whole-time directors, needs to be professionalised, and a three-phase process is envisaged. In the first phase, until the Bank Investment Company (BIC) becomes operational, a Bank Boards Bureau comprising former senior bankers should advise on all board appointments, including those of chairmen and executive directors.” It was suggested that in the second phase, the BBB’s functions will taken over by the BIC. The government has also said the bureau will help the expert committee, which will identify public sector banks for consolidation.

The first meeting of the BBB, which officially started functioning from April 1, will take place later this week in Mumbai.

The Bureau will also be involved in making strategies for public sector banks

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Printable version | May 15, 2021 1:15:09 AM |

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