Banks Board Bureau's role may not be widened, says Arun Jaitley

Chairman Vinod Rai had pointed to communication gaps between the finance ministry and the BBB in his letter to the FM

Finance Minister Arun Jaitley on Tuesday ruled out giving a wider mandate to the Banks Board Bureau (BBB), days after its Chairman Vinod Rai suggested the government give the body a broader role in the banking framework.

 

“The Bureau is doing pretty well in its present form,” Jaitley said, after launching the book Seven Decades of Independent India: Ideas and Reflection written by Rai and Amitendu Patil, senior research fellow and research lead (trade and economic policy) at the Institute of South Asian Studies (ISAS). Jaitley said the Bureau’s role may not be widened for now.

 

Rai had released a report “Compendium of Recommendations” last week highlighting the role the Bureau played since its inception in April 2016. The tenure of all the members of the BBB is set to expire on March 31.

 

In the report, Rai had cited a letter sent to the finance minister on July 26, 2017, that listed the problems faced by the BBB and the future role it sought from the government.

 

Among various things, the BBB had asked for a role in consolidation of public sector banks, a mechanism to engage with the banks’ boards directly, provide “independent feedback” to the FM twice a year on the degree of implementation of governance reforms in banks, and to create a strategy on asset quality resolution of banks.

 

Rai had also pointed to communication gaps between the finance ministry and the BBB in his letter to the FM.

 

“The BBB, as a body of experts on public sector banking, would be able to provide greater utility to the finance minister on matters relating to the governance and performance of PSBs, if there were to be greater organic linkage and dialogue with the finance ministry. At present, the body is merely functioning as an appointment board,” the letter stated.

 

In an interview to Press Trust of India, Rai said on Monday that the BBB enjoyed a good rapport with the finance ministry and did some “monumental work” with the support of the RBI and government officials.