Govt likely to dissolve Banks Board Bureau
20 Feb 2018
Amidst mounting losses at state-run banks and the ever widening bad loan problems, the government is reported to be considering dissolving the Banks Board Bureau (BBB) headed by former Comptroller and Auditor General Vinod Rai, after its term ends on 31 March.
Reports quoting finance ministry sources said the government may dissolve the board as it takes strong measures to reform the banking companies rather than keep an ineffective watchdog to oversee the crumbling of the financial system
''The government is considering dissolving it. The chairman is retiring in March; it will be done after that,'' the report quoted the official as saying. ''The government will take many strong reformative steps, even if it means dismantling institutions, which had not kept checks and balances,'' he added.
The Banks Board Bureau (BBB), an autonomous body under the Department of Financial Services, was set up in 2016 to help the government in selection of top executives of PSBs and enforce a code of conduct and ethics for managerial personnel.
The government had also roped in Vinod Rai, former Comptroller and Auditor General of India who blew the whistle on the 2G spectrum scam to head the bureau, hoping that the board under Rai would help stem the rot in public sector banks. However, nothing has happened despite Rai heading the BBB.
BBB may not be entirely to blame as the bureau was overlooked in the appointment of all the top-level executives, including the head of Punjab National Bank. One BBB member, H N Sinor, even resigned after the board was bypassed when the government changed the top management of Bank of India and PNB.
In fact, the government's decision to shift PNB chief Usha Ananthasubramanian to Allahabad Bank and Bank of India head Melwyn Rego to Syndicate Bank was taken outside the BBB.
Sources say, with no role to play in the selection of bank chiefs, Rai has been forced to shift his interest from banking to cricket.
''The BBB was tasked to build a performance-based database of senior management and board of directors of PSBs, which help the government in preparing a succession plan. The second one was technological upgradation and training of banking staff, including in the managerial level. Nothing happened and he (Rai) failed to meet expectations,'' an IBA member said.
The BBB was set up under the government's Indradhanush programme to reform public sector banks. It started operations in April 2016.
The BBB was conceived by the PJ Nayak committee and was seen as a step towards reforming the boards of public sector banks.
The committee, in its report, had recommended that the government should distance itself from the appointment process of top management and board members of PSBs - a function that could be performed by the BBB.
However, in practise that never happened. While the BBB was involved in shortlisting and interviewing candidates - the final appointment was always made by the government.
