Banks board bureau to be set up in next 4 mths: Finmin

Finance Ministry today said an autonomous banks board bureau is expected to be constituted in the next four months for improving governance of public sector banks.
"The Bureau should be hopefully in place in the next 3-4 months after it is cleared by Appointments Committee of the Cabinet (ACC) headed by Prime Minister Narendra Modi," Department of Financial Services Secretary Hasmukh Adhia told PTI in an interview.
The proposed six-member bureau once in place will search and select heads of public sector banks and help them in developing differentiated strategies of capital raising plans to innovative financial methods and instruments, he said.

It will also steer strategy discussion on consolidation based on the requirement, he added.
Last week, Finance Minister Arun Jaitley in his Budget speech had announced setting up autonomous banks board bureau for helping lenders raise capital for meeting expansion needs.
This would be a step towards establishing a holding and investment company for banks.

This issue was discussed extensively at the Gyan Sangam addressed by Modi in the first week of January.
During the two-day bankers' retreat, heads of financial institutions have suggested the creation of Bank Investment Committee (BIC) and transfer of the government's investment in banks to BIC.

Creation of BIC would over the time enable the government to reduce ownership to below 51 per cent and help banks generate capital for growth.
In December, the government decided to permit public sector banks to raise up to Rs 160,000 crore from capital markets by diluting government holding to 52 per cent in phases so as to meet Basel III capital adequacy norms.
Public sector banks alone require Rs 2.40 lakh crore by 2018 to meet global Basel III norms.