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BBB based PYQ and FSIB

 

Banks Board Bureau[BBB] was established in 2016 and there are already 2 questions about it.


Now BBB replaced by Financial Service Institution Bureau [FSIB] so it becomes an important topic we will go through BBB PYQ and FSIB topics.


With reference to the ‘Banks Board Bureau (BBB)’, which of the following statements are correct? [2022]

1.  The Governor of RBI is the Chairman of BBB.

2. BBB recommends for the selection of heads for Public Sector Banks.

3. BBB helps the Public Sector Banks in developing strategies and capital raising plans.

Select the correct answer using the code 

given below :

(a)        1 and 2 only

(b)        2 and 3 only

(c)        1 and 3 only

(d)        1, 2 and 3

 

Tip -

RBI Governor is not the chairman of BBB

 

Solution - B



The Chairman of public sector banks are selected by the [2019]

(a) Banks Board Bureau

(b) Reserve Bank of India

(c) Union Ministry of Finance

(d) Management of concerned bank

 

 

Solution- A

 

BBB was set up in 2016.

It selects top officials (MD, CEO, Chairman etc) for public sector financial institutions like PSBs, LIC etc.


Financial services institution bureau

 

 


Basics




Syllabus

 

·        GS-2: Statutory, regulatory and various quasi-judicial bodies.

·        GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development

 

Full Form

FINANCIAL SERVICES INSTITUTION BUREAU

Replaced

 Banks Board Bureau (BBB)


BBB origin

estd in 2016 as

 

an autonomous recommendatory body

 

recommended by P.J. Nayak committee set up to prescribe ways to resolve the issues plaguing

India’s public banking sector.

 

established with a view to improve the Governance of Public Sector Banks (PSBs)

 

part of the 7-point strategy of the Indradhanush Mission aimed at revamping PSBs

 

Why

1. Legal hurdles over its power and jurisdiction:

The Delhi High Court in 2021 ruled that the

 

BBB couldn’t select the general managers and directors of state-run general insurers, as it was not a competent body.

 

 

Subsequently, at least half a dozen newly-appointed directors of non-life insurers had to vacate their positions.

 

More importantly, it led to uncertainties over the filing up of top posts at state-run insurers, with several appointments getting stuck in this process.

 

Slow appointment process:

weighted average time

taken for recommending the positions in PSBs was 76 days

 

Lack of autonomy

Government continued to exercise its

authority over PSBs as

 

credit,

expansion and

even appointments of chairmen have to go through

 

Appointments Committee of the Cabinet (ACC)

[headed by PM]

under

Department of Financial Services (DFS), Ministry of Finance

 

Function--- Most important based on BBB PYQ




Trick

all assets, interests, and liabilities of BBB stand transferred to FSIB.

 

1. Recommend persons for 

as whole-time directors and non-executive chairpersons on the Boards

of financial services institutions

 

2. Personnel management

 

3. Corporate Governance 

[Syllabus Keyword ]

 

Corporate governance is the system by which companies are directed and controlled.

 

Boards of directors are responsible for the governance of their companies.

 

The shareholders' role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place.

 

By advising government on different matters related to top management.

 

FSIB will build a databank containing data related to the performance of these financial institution

 

4.Help PSBs, Fls and PSIs business strategies and capital raising plan.

 



 

Composition





Chairperson

Nominated by Central government

 

Eligibility criteria are not important for Exam

 

E.g.

retired official from the banking sector or a

regulatory institution

 

or several Other criteria which are not important

 

Ex officio members:

Secretary in charge of DFS,

 

Department of Public Enterprises,

 

Chairperson of the Insurance Regulatory and Development Authority of India (IRDAI),

 

Deputy Governor of RBI

 

Not the Governor of RBI or chairperson of SEBI

 

Part-time Member

Subject matter expert

 three part-time members who are experts in banking and three more from the insurance sector.

 

 

Significance




1.Decrease time taken for appointments:

2.Better Human Resource (HR) Management

develop a robust leadership succession plan for critical

positions 

 

3.Improved corporate governance:

mandate like advising the government on formulation and enforcement of a

code of conduct and ethics for whole-time directors 

 

4. Transparency in the selection process

Promotions and recruitments happened at the will and mercy of the government.

 

So government influence will be reduced


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