Establishment of Financial Services Institutions Bureau in place of Banks Board Bureau

Tags: Economy/Finance

The Cabinet Appointments Committee (ACC) has passed a government resolution to establish the Financial Services Institutions Bureau (FSIB) in place of the Banks Board Bureau (BBB).

• The new framework was proposed by the Department of Financial Services, Ministry of Finance.

• The Delhi High Court had nullified the BBB's power to select directors of public sector undertakings, general insurance companies and the government had already implemented the decision by cancelling all appointments of then serving directors chosen by the BBB.

• Financial Services Institutions Bureau 

• The Bureau of Financial Services Institutions will select the heads of public sector banks and insurance companies.

• The FSIB will have a clear mandate to issue guidelines and select general managers and directors of state-run non-life insurance companies, general insurers and financial institutions.

• FSIB will be the single body to make recommendations for appointment of whole time directors and non-executive chairman in public sector banks, India Private Limited Company and financial institutions.

• The Department of Financial Services will make necessary amendments in the first Nationalised Banks (Management and Miscellaneous Provisions) Scheme 1970/1980 (Revised).

• Chairman of FSIB- ACC has approved the appointment of Bhanu Pratap Sharma as the initial chairman of FSIB for two years. He is also the former president of BBB.

• Banks Board Bureau (BBB)

• The Banks Board Bureau (BBB) was formed in the year 2014 based on the recommendations of PJ Nayak to address the challenges faced by the banking sector of the country.

• The BBB functions as an autonomous recommender body.

• The Banks Board Bureau was a public authority as defined in the Right to Information Act, 2005.

• Besides recommending personnel for public sector banks, the bureau was also entrusted with the task of recommending personnel for appointment as directors in state-owned insurance companies.

• It was also entrusted with the task of liaising with the Board of Directors of all PSBs to devise suitable strategies for their growth and development.