 "Vinod Rai and Arun Jaitley")
Finance Minister Arun Jaitley has met Bank Boards Bureau chairman Vinod Rai on a number of occasions, and discussed the functioning of BBB and banking reforms. The last meeting between the two happened on a weekend, earlier this month, at Jaitley’s residence.
On Monday, The BBB, in a 60-page report of its recommendations for reforms in state-owned banks, had said that the centre had been sitting over its suggestions. Rai alleged communication breakdown and said that the Finance Ministry’s Department of Financial Services (DFS) has not responded to its counsel, and that a meeting sought with Jaitley, on July 26, 2017, was still pending.
Senior government sources said this wasn’t the case, and that Jaitley is himself likely to respond to these allegations soon.
“Since the date mentioned in the BBB report (July 26), the FM and the BBB chairman have met on a number of occasions, formally as well as informally. Banking reforms and the functioning of BBB has been discussed between the two,” an official told Business Standard. The person added that DFS Secretary Rajiv Kumar has also met Rai and other members of BBB to discuss its recommendations.
A second official confirmed that the DFS has responded to the BBB's recommendations through formal channels. However, officials did not divulge further details on the contours of such discussions.
The BBB’s report, titled ‘Compendium of recommendations’ was put in public domain barely 10 days before the tenure of all the members of the BBB is set to expire on March 31, highlighting the work done by the Bureau in the last two years. In the report, Rai mentioned a communication breakdown between the National Democratic Alliance (NDA) government and the BBB, which was set up in February 2016 under the former Comptroller and Auditor General to usher in governance reforms in public sector banks.
Rai also underlined extracts of a letter sent by him to Jaitley on July 26 to set out a framework on the role of the BBB, seeking time for a meeting with the minister to discuss those issues, one of which included the need for “an organic relationship between the government and the bureau.” “The bureau continues to await a meeting (with the FM),” Rai said in the footnote of the report. The BBB said it was yet to hear from the department of financial services on recommendations made on reforms in appointments, compensation, performance assessment and governance over a year ago.
In the report, Rai also pressed for banking regulations being made independent of ownership, a position similar to what Reserve Bank of India Governor Urjit Patel had taken in a public event a few days ago, in the light of the Rs 129 billion Punjab National Bank scam.
Finance ministry officials have ruled out abolishing the BBB, which started functioning Rai from April 2016 as an autonomous body to recommend improvements in governance at public sector banks.
The tenure of all BBB members is set to expire on March 31. Apart from former Comptroller and Auditor General Rai, its members include Department of Public Enterprises Secretary Seema Bahuguna, Reserve Bank of India Deputy Governor N S Vishwanathan, former Bank of Baroda chairman and managing director Anil K Khandelwal, former ICICI Bank joint managing director H N Sinor, and former Crisil chief Roopa Kudva.
Department of Financial Services Secretary Rajiv Kumar is the ex-officio member of the BBB. A search committee comprising the RBI governor and secretaries of the department of financial services and department of personnel and training may soon take a call on the new members of the BBB.
