Banks Board Bureau for Public Sector Banks’ good governance

Q.  Which of the following will be functions of the proposed Banks Board Bureau?

1) Recommend appointment of directors in Public Sector Banks
2) Deal with stressed assets issue
3) Advice to raise capital
- Published on 29 Feb 16

a. 1
b. 1, 3
c. 2, 3
d. All of the above

ANSWER: All of the above
 
  • With a view to improve the Governance of Public Sector Banks (PSBs), the Government had decided to set up an autonomous Banks Board Bureau.
  • The Bureau will recommend for selection of heads - Public Sector Banks and Financial Institutions and help Banks in developing strategies and capital raising plans.
  • Former Comptroller and Auditor General (CAG) Vinod Rai appointed as the first Chairman of Banks Board Bureau.
  • The BBB will also be a link between the government and banks and will be engaged with banks to evolve strategies for them.
  • The bureau will be a six-member board comprising three from the private sector and three government nominees, while the chairman will be a distinguished banker or regulator.
  • Autonomous Banks Board Bureau will help lenders raise capital for meeting expansion needs.
  • The government members are ex-officio. They are - Secretary, Department Financial Services; Secretary, Department of Public Enterprises and Deputy Governor, Reserve Bank of India.

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