Bank Board Bureau holds first meet, discusses stressed assets

The maiden meeting of the newly-constituted Bank Board Bureau (BBB) today discussed board-level vacancies as well as recognising stressed assets and resolving issues around them.
The Bureau, headed by former comptroller and auditor general of India (CAG) Vinod Rai, also discussed strategies for recapitalising banks and making them more competitive, Minister of State for Finance Jayant Sinha told reporters here.
Sinha, who along with RBI Governor Raghuram Rajan was part of the initial deliberations of the Bureau in Mumbai, said filling up of vacancies of directors and non-executive chairmen was discussed at the meeting.
"Second, how to better recognise the stressed assets and if there are some hurdles, then how to solve them was discussed," said the minister, who flew down here from Mumbai after the initial round of discussions.

Recapitalising banks and strategies around it also figured in the discussions. "How that will happen, how the government and RBI will work with banks' boards was discussed," he said.
The agenda was also to deliberate on making banks more competitive if they have to compete in this changing financial landscape. "Then, what the role of consolidation will be and how much capital it will require from the government also came up," he said.

The day-long meeting was held at the Reserve Bank's office in central Mumbai.
Besides Rai, Bureau members -- ICICI Bank's former Joint Managing Director H N Sinor, Bank of Baroda's former CMD Anil K Khandelwal and rating agency Crisil's ex-chief Rupa Kudwa -- were present.

Its ex-officio members -- Ameising Luikham, Secretary Department of Public Enterprises, and R Gandhi, Deputy Governor, Reserve Bank -- too attended.
The Bureau has three ex-officio members and an equal number of expert members in addition to the chairman.
In the initial phase of today's meeting, Sinha, Rajan and his deputy S S Mundra were also present, but left early.
The Bank Board Bureau has been constituted to help the
government select heads of public sector banks and financial institutions and assist banks in developing strategies and capital-raising plans.
There are 22 state-owned banks in the country, including SBI, IDBI Bank and Bhartiya Mahila Bank.

BBB was proposed by the government as a body of eminent professionals and officials, which will replace the Appointments Board for appointment of whole-time directors as well as non-executive chairman of PSBs.
They will also constantly engage with the board of directors of all the public sector banks to formulate appropriate strategies for their growth and development.
The Bureau will search and select heads of public sector banks and help them develop differentiated strategies of capital-raising plans for innovative financial methods and instruments.
It will also be responsible for selection of non-executive chairman and non-official directors on the boards.
Besides, the body will steer strategy discussion on consolidation based on requirements.