New entity with bigger mandate to replace Bank Board Bureau
The central government is planning to replace the Banks Board Bureau (BBB) with a new body with a broader mandate. According to the information received, the central government is planning to set up a new institution in place of the bank board. The new institution will have a broader and more legally valid mandate.
- Banks Board Bureau is an autonomous body of the Government of India. It was established in the year 2016 based on the recommendation of PJ Nayak Committee.
- Its objective is to select and appoint board members of individual public sector financial institutions.
- The Banks Board Bureau was also entrusted with the task of liaising with the Board of Directors of all Public Sector Banks. The main objective behind this is to formulate a suitable strategy for the growth and development of the banks.
- The board was also consulted for the merger of 10 public sector banks to form four big banks.
- The Banks Board Bureau had made certain appointments in public sector general insurance companies. In the year 2021, the Delhi High Court quashed the appointments made by the Bureau due to the superseding of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.
- The Court had also struck down the circulars/orders which allowed the Banks Board Bureau to do so.
- Insurance companies will also be covered under the jurisdiction of the proposed entity. It will recommend candidates for appointment to senior management level positions in government-run banks, insurance companies and other financial institutions.
Source – The Hindu