UPSC Exam Preparation: Topic of the Day – Banks Board Bureau
With the intention of providing assistance to Public Sector Banks (PSBs) to restructure their business strategies, suggest plans for merger with other banks and for consolidation of banks while they were are trapped in the problem of high collective gross Non Performing Assets (NPA), Banks Board Bureau (BBB) was set up in the year 2016. It was a replacement to the erstwhile Appointments Board of the Government. The aim was to herald a new era of governance and business strategies for state-run banks that could place them on par with the relatively enviable private sector peers.
It was a part of the seven-point strategy of the Indradhanush Mission aimed at revamping the Public Sector Banks. It is an autonomous body of officials and distinguished professionals for the PSBs and is housed in Reserve Bank of India’s central office in Mumbai.
- Banks Board Bureau comprises of a chairman, secretary of the Department of Financial Services (Ex-officio member), Secretary, Department of Public Enterprises (Ex-officio member), Deputy Governor of the Reserve Bank of India and five other members (initially three). The decision to appoint two additional members to the Banks Board Bureau was taken in the year 2017 in order to strengthen the panel and eliminate delays in timely recommendations for filling up the key positions in the PSBs.
- Recommendations for appointment of non-executive chairman and the full time directors for PSBs are given by the Banks Board Bureau.
- Assistance is provided to PSBs in coming up with differentiated strategies for following innovative financial methods and instruments for raising funds and comprehensively deal with the problems of stressed assets.
- PSBs are provided guidance on addressing the issues of bad loans plaguing their Balance Sheets for a long time and suggestions such as bank consolidations or mergers are provided by the Banks Board Bureau.
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