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GS Paper 3
Syllabus: Indian Economy and issues relating to planning, mobilisation of resources, growth, development and employment.
Context:
The finance ministry is working to expand and relaunch the Banks Board Bureau (BBB) by bringing in more representatives from the insurance sector.
Revamp plan:
- Add new member
- Empower: Finance ministry wants to legally empower the body to recommend candidates for public sector insurers and accelerate top-level hiring at all state-run financial institutions.
- Restructure: BBB’s name and mandate will be changed. The proposed entity will recommend candidates for appointments to senior management-level posts in state-run banks, insurance companies and other financial institutions.
Why the need for revamping:-
- Delhi HC order: Delhi high court last year observed that the bureau was not a competent body to recommend appointments at PSU general insurers, and held that circulars enabling BBB to select general managers and directors of PSU insurers were not legally valid.
- Slow recruitment process: Despite the BBB’s good work, recruitment to a higher level has been slow. Also, BBB’s extended two-year term ended, and new recruitments can restart only when a new body is in place.
About BBB:
It was set up in February 2016 as an autonomous body– based on the recommendations of the RBI-appointed Nayak Committee.
- It was part of the Indradhanush Plan.
- It will make recommendations for the appointment of whole-time directors as well as non-executive chairpersons of Public Sector Banks (PSBs) and state-owned financial institutions.
- The Ministry of Finance takes the final decision on the appointments in consultation with the Prime Minister’s Office.
Composition:
Banks Board Bureau comprises the Chairman, three ex-officio members i.e Secretary, Department of Public Enterprises, Secretary of the Department of Financial Services and Deputy Governor of the Reserve Bank of India, and five expert members, two of which are from the private sector.
Practice Questions:
Q. With reference of the ‘Banks Board Bureau (BBB)’, which of the following statements are correct? (UPSC 2022)
- The Governor of RBI is the Chairman of BBB.
- BBB recommends for the selection of heads for Public Sector Banks.
- BBB helps the Public Sector Banks in Developing strategies and capital raising plans.
Select the correct answer using the code given below:
- 1 and 2 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 2
Answer: b
BBB is a self-governing autonomous and advisory body of the Central Government to improve the management of public sector banks.
Statement 1 is incorrect: The Chairman is selected by the central government and the RBI governor does not head it.
Statements 2 and 3 are correct: Banks Board Bureau recommends the selection of head for Public Sector Banks. It also develops strategies for raising capital and improving the performance of PSBs.
Q. Consider the following statements about Banks Board Bureau :
- The BBB is a not-for-profit organisation registered under Section 8 of the Companies Act 2013.
- The BBB was the part of Indradhanush Plan of government.
- It will make recommendations for appointment of whole-time directors as well as non-executive chairpersons of Public Sector Banks and state-owned financial institutions.
Which of the given above statements is/are correct?
a. 1 and 2 only
b. 2 and 3 only
c. 1 and 3 only
d. 2 and 3
Ans: (b)
Source: Live Mint
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