IBA- Indian Banks’ Association

Indian Banks’ Association is acronymed as IBA, is the representative body of management of banking in India operating in India. IBA over the years have emerged as the voice of Indian banking Industry. 

Details regarding the Indian Bank Association holds importance for the GS3 section of IAS exam. Candidates preparing for other competitive exams might also encounter questions based on IBA. 

IBA – Indian Banks Association in the news – 

  1. IBA has filed an application with the corporate affairs ministry for the incorporation of the National Asset Reconstruction Company (NARCL), which will pave the way for its swift operationalisation. 
    • Not just large lenders but all public-sector banks (PSBs), except for the Punjab & Sind Bank, have evinced interest in picking up stakes in the so-called bad bank.
    • Aspirants can know in detail about the Asset Reconstruction Companies – ARC on the linked page. 
  2. The Indian Banks’ Association (IBA) has held its 73rd annual general meeting virtually. In the meeting, the Finance Minister of India suggested the banks to bring new reforms and implement the existing ones in a timely manner. Check out Banking sector reforms and Acts on the given link. 

Indian Banks Association [UPSC Notes]:-Download PDF Here

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Refer to the links below and complement your UPSC exam preparation:

Indian Banks’ Association – IBA Overview

  1. IBA is an association of Indian banks and financial institutions. It is the representative body of management of banking in India that is operating in India.
  2. Indian Bank Association was formed on September 26 1946, in Mumbai.
  3. IBA adopts a consultative approach to give its view on any issue pertaining to the banking sector. 
  4. Indian Banks’ Association is managed by a managing committee, and the current managing committee consists of one chairman, 3 deputy chairmen, 1 honorary secretary and 26 members.
  5. Shri Rajkiran Rai G is the Chairman of IBA and Shri Sunil Mehta Chief Executive at IBA.
  6. With an initial membership representing 22 banks in India in 1946, IBA currently represents 241 banking companies operating in India.
  7. The members of IBA comprise of – 
    • Public Sector Banks
    • Private Sector Banks
    • Foreign Banks having offices in India
    • Co-operative Banks
    • Regional Rural Banks and
    • All India Financial Institution. 

Candidates can go through the following relevant links for assistance in preparation – 

  1. List of Regional Rural Banks in India
  2. List of Co-operative banks in India
  3. Types of Banks in India

UPSC 2021

Vision of Indian Banking Association- IBA

To work proactively for the growth of a healthy professional and forward looking banking and financial services industry in a manner consistent with public goods

Objectives of IBA

  1. To contribute to the developments of creative banking.
  2. To promote and develop sound and progressive banking principles, practices and conventions in India.
  3. To develop and implement new ideas and innovations in banking services, operations and procedures.
  4. To organize co-ordination and co-operation on procedural, legal, technical, administrative or professional problems and practices of banks and the banking industry.
  5. To collect, classify and circulate statistical and other information on the structure and working of the banking system.
  6. To act as a clearing house for dissemination and exchange of statistical data and other information.
  7. To explore, plan, coordinate and organize detailed surveys on banking, business, resources, personnel and management development programmes of banks and the banking industry.
  8. To promote education and knowledge of the law and practice of banking.
  9. To organize exchange of credit information and opinions, export information or information and views on the banking industry.
  10. To project a good public image of banking as a service industry and develop good public relations.
  11. To promote harmonious personnel relations in banking industry and to devise ways and means for involving banking personnel in the endeavours of banks for growth and development of banking and the economy of the country.
  12. To maintain close coordination and liaison with Reserve Bank of India RBI, All Financial Institutions, Chambers of Commerce, Organisations of Banking Industry, Management or Educational Institutes, Universities and such other Organisations for realizing the subject and purposes of the Association.

Read more on the history of Banking in India on the given link. 

Daily News 2021

IBA – Issues Associated

  • IBA claims it to be a voluntary association of member banks which is neither a governmental entity nor a regulatory authority.
  • It says that it is not compliant to the writ jurisdictions of courts and not subjected to Right to Information Act, 2005.
  • It has not designated any Central Public Information Officer (CPIO) till now.
  • But IBA is financed by member banks and the public does not know the financial status of IBA though all PSBs and listed private banks contribute to its functioning.

Details of R K Jain and indian Banks’ Association Case

  1. Since, IBA performs functions as state agency and majority of its control vests in the Managing Directors of PSB appointed by the Government of India.
  2. The CIC – Central Information Commission said that Indian Banks Association qualifies to be a public authority under the RTI Act, 2005 and directed it to designate an official as the CPIO and to comply with Section 4 of the RTI Act.
  3. IBA filed a writ petition before the Delhi High Court the order of Central information Commission was stayed by the Court.
  4. As per the Court’s observation IBA is an association of banks that has 241 members and only 9 members are from the PSBs.

Take Away from the IBA Case

  1. Ideally, who controls the IBA, the financial contribution to run the IBA and how the positions are held should have been considered.
  2. The number of Public Sector banks mentioned was incorrect as there were 16 Public Sector Banks before the merger of 10 PSBs into 4 banks effective from April 1, 2020.
  3. More than 50% of management committee members of the Indian Banks’ Association are from PSBs & the amount of money that flows from Public Sector Banks to IBA is not available in the public domain.
  4. Moreover, the comparison on the number of PSBs and the private banks is inappropriate.
  5. Transparency and accountability in administration is a precondition for a participatory democracy.
  6. Hence the government must instruct the Managing Committee of IBA from PSBs to ensure that IBA comes under the RTI Act.

Indian Banks Association [UPSC Notes]:-Download PDF Here

Candidates preparing for the upcoming Civil Services Exam can get the detailed UPSC Syllabus and exam pattern at the linked article.

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