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Bank Board Bureau
The Banks Board Bureau (BBB) was established in 2016 as a significant measure to bring about reforms in the banking sector, with a particular focus on revitalizing public sector banks. The primary purpose of the BBB was to devise and execute effective strategies for the appointment, extension, and termination of board members in public sector banks, public sector insurance companies, and financial institutions. By developing and implementing appropriate methodologies, the bureau aimed to ensure transparent and merit-based selection processes for these key positions, thereby enhancing the governance and performance of these entities.
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What is Bank Board Bureau?
The Bank Board Bureau (BBB) is an independent and self-governing autonomous body established by the Central Government. It operates as an advisory authority, consisting of renowned professionals and officials, with the objective of enhancing the management of public sector banks (PSBs). The headquarters of the Banks Board Bureau is located at the Central Office of the Reserve Bank of India in Mumbai, and it commenced its operations on April 1, 2016.
The creation of the BBB was a crucial element of the Indradhanush Mission, a comprehensive strategy aimed at revitalizing the public sector banks. As an autonomous body comprising officials and distinguished professionals, the BBB’s primary focus is on improving the functioning of PSBs. It operates as a not-for-profit organization and was initially expected to receive initial financial support from the Reserve Bank of India. Subsequently, the Bureau would distribute its expenses among the PSBs.
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Functions of Bank Board Bureau
The various functions performed by the Bank Board Bureau (BBB) include:
| Function | Details |
| Appointments | Recommending suitable candidates for top positions in PSBs, public sector insurance companies, and financial institutions. |
| Governance Reforms | Enhancing the governance framework, risk management systems, and overall governance structure of PSBs. |
| Capacity Building | Developing the skills and capabilities of board members and top executives through training and professional development programs. |
| Performance Monitoring | Monitoring the performance of PSBs and providing feedback and guidance to improve operational efficiency and financial health. |
| Promoting Collaboration | Encouraging collaboration and knowledge-sharing among PSBs to drive an overall improvement in the banking sector. |
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Composition of Bank Board Bureau
The composition of the Banks Board Bureau includes:
| Composition | Details |
| Chairman | The BBB is led by a Chairman who is responsible for overseeing its operations and providing strategic direction. |
| Ex-officio members | The BBB consists of three ex-officio members who hold their positions by virtue of their roles in the government and regulatory bodies. These members are the Secretary of the Department of Public Enterprises, the Secretary of the Department of Financial Services, and the Deputy Governor of the Reserve Bank of India. |
| Expert members | The BBB also comprises five expert members who bring their specialized knowledge and experience to the table. Two of these expert members are selected from the private sector, ensuring a diverse perspective and input. |
This composition ensures a balance of government officials, regulatory representatives, and experts from the private sector, allowing for a comprehensive approach to improving the management and governance of public sector banks.
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Financial Services and Insurance Board
Last year, the Delhi High Court declared the Bank Board Bureau (BBB) as an ineffective authority following a legal challenge by a general manager from the National Insurance Company. The challenge was made against the appointment of a junior candidate by the BBB for a director’s position. As a result of the court order, around 10 to 11 directors who were appointed by the BBB had to resign.
To resolve this deadlock, the BBB was dissolved, and a new entity called the Financial Services and Insurance Board (FSIB) was established. The formation of the FSIB was approved by the Appointments Committee of the Cabinet, which is chaired by the Prime Minister. This step was taken to address the issues surrounding the appointments made by the BBB and to bring about a fresh approach to the governance and management of public sector banks and insurance companies.
Read about: Public Sector Banks
Financial Services and Insurance Board Chairman
Currently, Bhanu Pratap Sharma, who served as the chairman of the Bank Board Bureau (BBB), also holds the position of Chairman in the newly established Financial Services and Insurance Board (FSIB). Animesh Chauhan, the former chairman and managing director of Oriental Bank of Commerce, along with Shailendra Bhandari, former MD and CEO of ING Vysya Bank, and Deepak Singhal, former Executive Director of the Reserve Bank of India (RBI), have been appointed as part-time members of the FSIB.
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Bank Board Bureau UPSC
The Bank Board Bureau (BBB) which is now called Financial Service and Insurance Board (FSIB) is an important topic for UPSC (Union Public Service Commission) as it is relevant to the UPSC Syllabus, particularly in areas such as governance, economic development, and banking reforms. Understanding its functions and significance is crucial for aspirants preparing for UPSC exams, as questions related to banking sector reforms, autonomous bodies, and public sector management can be expected. To cover such topics, aspirants can make use of UPSC Online Coaching and UPSC Mock Test which can enhance their knowledge and preparation in this domain.
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