BBB's powers nixed: Top brass selection of PSU insurers stuck
- THE SELECTION process of top officials of public sector insurance companies is in limbo in the wake of the Delhi High Court's decision to strike down the power of Banks Board Bureau (BBB) to select directors of PSU insurers.
- The government is now getting ready to activate an alternative mechanism to conduct the exercises for selecting the top management of PSU insurers.
- The alternative framework of BBB for the selection of top PSU insurers is almost ready and waiting for the final approval of the PMO.
- The government has already implemented the verdict by cancelling all the appointments of the then serving directors who were selected by the BBB.
- The Finance Ministry is unable to use the BBB's platform to select any new CMDs for the PSU insurance companies which it has been doing since 2018.
Background and Formation
- The Banks Board Bureau (BBB) has its genesis in the recommendations of ‘The Committee to Review Governance of Boards of Banks in India, May 2014 (Chairman - P. J. Nayak)’.
- The government, in 2016, approved the constitution of the BBB as a body of eminent professionals and officials to make recommendations for appointment of whole-time directors as well as non-executive chairpersons of Public Sector Banks (PSBs) and state-owned financial institutions.
- It is an autonomous recommendation body.
- The Ministry of Finance takes the final decision on the appointments in consultation with the Prime Minister’s Office.
- Apart from recommending personnel for the PSBs, the Bureau has also been assigned with the task of recommending personnel for appointment as directors in government-owned insurance companies.
- It engages with the board of directors of all the public sector banks to formulate appropriate strategies for their growth and development.
- It is tasked with improving corporate governance at public sector banks, building capacities, etc.
- The Banks Board Bureau is a public authority as defined in the Right to Information Act, 2005.
- Bank Board Bureau
- PJ Nayak Committee