SYLLABUS SECTION: GS III (ECONOMY)
WHY IN THE NEWS?
The central government is planning to introduce a new entity with wider mandate in place of the Banks Board Bureau (BBB), With a wider and more legally tenable mandate.
- As reported, Centre is planning to introduce a new entity in place of BBB, with a wider and more legally tenable mandate.
- It will recommend candidates for appointments to senior management-level posts in state-run banks, insurance companies and other financial institutions.
- The government will continue to maintain an arm’s length distance on matters of such appointments.
BANKS BOARD BUREAU (BBB)
- BBB is an Autonomous Body of the Government of India founds in 2016.
- It was establish on the basis of the P.J. Nayak Committee’s recommendation to select and appoint Board members for various financial institutions in the public sector.
- BBB was also entrust with the task of engaging with the board of directors of all PSBs to formulate appropriate strategies for their growth and development.
- The Bureau is a not-for-profit autonomous body that was initially expect to meet its expenses,
- With upfront support from the Reserve Bank of India and thereafter distribute the expenses among the PSBs.
- BBB was a part of the seven-point strategy of the Indradhanush Mission aim at revamping the Public Sector Banks.
- The board was also consulting on the move to merge ten PSBs to create four larger entities.
- In 2021, the Delhi High Court set aside appointments made by the BBB in public sector general insurance companies for being ultra vires of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980.
- The Court set aside the circulars/Orders which allow BBB to do so.
- The proposed entity mandate will include insurance companies, i.e. it will recommend candidates for appointments to senior management-level posts in state-run banks, insurance companies and other financial institutions.
- Under the Right to Education Act, 2005 the Banks Board Bureau is a public authority.
Read more: UPSC CURRENT AFFAIRS
SOURCE: FINANCIAL EXPRESS