The Banks Board Bureau (BBB), which selects whole-time directors of state-run lenders, has zeroed in on 75 senior management personnel of public-sector banks to take over leadership role in the future. It has also pitched a case for “giving a complete autonomy to banks to decide organisational structure for better efficiency”, the BBB said in its activity report for the October 2018-March 2019 period.
The BBB has now been tasked with the responsibility of recommending personnel for appointment as directors in state-run insurance companies as well, along with nationalised banks, according to the report. Accordingly, on January 4, it made its recommendations for the appointment of chairman and managing directors of LIC, it added.
The Bureau has chosen the 75 bankers for the top role from a pool of 450 senior management personnel across nationalised banks. “They are presently undergoing deeper assessments after which Individual Development Plans will be generated. Shortly, a globally ranked Indian Institution will be identified where every year the identified personnel will undergo intensive leadership development journey,” it said.
Over the past one year, the government has cleared all the appointments suggested by the BBB, including that of non-executive chairpersons Punjab & Sind Bank, Dena Bank, Central Bank of India and Bank of Baroda, apart from managing directors and executive directors of several banks. Recently, former finance secretary Hasmukh Adhia was appointed the non-executive chairman of Bank of Baroda. Earlier this week, RA Sankara Narayanan, former MD of Vijaya Bank, was appointed MD & CEO of Canara Bank until January 2020.
BBB, headed by former department of personnel and training secretary BP Sharma, also suggested a revamp of credit governance architecture in state-run banks to minimise credit costs and improve efficiency of credit allocation.
Question mark over the role and importance of the BBB was raised after the board, in a report of its work over two years, had suggested early last year that the finance ministry was sitting over some of its suggestions and sought a more “organic” relationship with it. The report also suggested that a request for a meeting with finance minister Arun Jaitley, sought on July 26, 2017, was still pending. However, subsequently, BBB’s then chairman Vinod Rai himself clarified that the finance minister had met him on several occasions, even after July last year, and took him into confidence on various issues, including on the transfer of two chiefs of public-sector banks — Punjab National Bank (PNB) and IDBI Bank — in 2017.
To usher in governance reforms in PSBs, the government had set up the BBB in 2016, headed by former comptroller and auditor general Rai, in sync with the recommendations of the PJ Nayak committee. The Bureau started functioning formally from April 1, 2016, as an “autonomous recommendatory body”.
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Apart from Sharma, the BBB comprises financial services secretary Rajiv Kumar, public enterprises secretary Seema Bahuguna, Reserve Bank of India deputy governor NS Vishwanathan, former vice-chairman of Credit Suisse Vedika Bhandarkar, former SBI MD Panja Pradeep Kumar and Crisil founder MD Pradip Panalal Shah.