Delhi HC recently struck down powers of Banks Board Bureau; new body to select chiefs of PSU banks, insurance firms

What is the News?

The Government of India has approved a government resolution for establishing the Financial Services Institutions Bureau(FSIB) in place of the Banks Board Bureau(BBB).

When was the Bank Board Bureau set up?

The Bank Boards Bureau was set up in 2016 as a body of eminent professionals and officials to make recommendations for the appointment of whole-time directors as well as non-executive chairpersons of public sector banks(PSBs) and state-owned financial institutions.

Why is BBB being replaced by the Financial Services Institutions Bureau(FSIB)?

The government was forced to replace the BBB with FSIB after the Delhi High Court in 2021 had ruled that the BBB couldn’t select the general managers and directors of state-run general insurers as it was not a competent body. 

Subsequently, at least half-a-dozen newly-appointed directors of non-life insurers had to vacate their positions. 

How will FSIB be different from BBB?

FSIB will do the same job but with a much larger, legally tenable mandate.

It will be a single entity for making recommendations for the appointments of whole-time directors, non-executive chairman in Public Sector Banks(PSBs), state-run non-life insurance companies and other financial institutions.

Source: The post is based on the article “Delhi HC recently struck down powers of Banks Board Bureau; new body to select chiefs of PSU banks, insurance firms” published in Indian Express on 2nd July 2022.