New Bank Board Bureau to meet today for the first time

Vinod Rai, the head of newly formed BBB (Bank Board Bureau) who previously headed the CAG (Comptroller and Audit General) is expected to hold the boards first meeting sometime on Friday.

Several issues concerning the public sector banking are expected to be discussed including the consolidation of state-run banks. BBB based in Mumbai is a newly formed board constituted by GOI to improve governance at Public Sector Banks. BBB is essentially a seven member board with a part-time chairman. BBB will be deciding on management and board level appointments in public sector banks thus distancing government interference in hiring key officials. Previously the modus operandi was different and a search panel use to be appointed with RBI governor heading the panel for recruiting the key personnel. This move by the GOI reflects an important reform in the public banking sector. The BBB will not only be involved in hiring key personnel for public sector banks but also will be involved in designing strategies for raising capital for the distressed sector.

The PSU banking sector has been in electric mood recently with the kind of volatility shown by the public sector banking stocks.. Several key reforms are expected for the benefit of the sector, if at all the sector has to survive and grow. In the midst of such concerns affecting the public sector banking the outcome of BBB meeting will be keenly watched by various stakeholders.