BBB should appoint top executives in state-run banks
Outgoing Reserve Bank of India (RBI) governor Raghuram Rajan emphasised on improving governance in public sector banks and said the task of appointing top executives and non-official directors in these entities should be left to the Bank Board Bureau (BBB). The government, at present, appoints the chief executive, executive directors as well as other board members. Mr. Rajan’s suggestion is in line with the PJ Nayak committee proposal, which was set up by the RBI to look into the issue of governance in Indian banks. “A parallel task for public sector banks was to improve the governance and management,” Mr. Rajan said in his speech at the FICCI-IBA banking seminar. He suggested that as the BBB gains experience in appointment process, the final decision relating to appointments of executives and of non-official directors on bank boards should be left to it. The government has set up the BBB in February this year under the chairmanship of former comptroller and auditor general of India, Vinod Rai. At present, the BBB is involved in the short listing and selection process of public sector bank executives but the final appointment is made by the government...
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