Question 70 from UPSC CSE 2019 - Economics

Question

The Chairman of public sector banks is selected by the

IASCODEX · Accepted Answer

Correct Option: A. Banks Board Bureau

Strategy: Focus on the institutional mechanism specifically set up for appointments in public sector banks. Banks Board Bureau is dedicated to recommending names for top positions in PSBs, unlike other bodies listed. RBI regulates banking, Ministry of Finance provides policy oversight, and bank management cannot appoint their own chairman.

Key Info: The Banks Board Bureau (BBB) was constituted in 2016 as an autonomous body to improve governance in Public Sector Banks (PSBs) and select their top management. Its main functions include recommending the appointment of Whole Time Directors and Non-Executive Chairmen in PSBs and financial institutions under government ownership. The Ministry of Finance oversees the banking sector but delegates this recruitment process to BBB for independence and transparency. The Reserve Bank of India (RBI), India's central bank, regulates and supervises banks but is not responsible for appointing PSB chairmen. Individual public sector banks' internal management cannot appoint their chairmen, as such appointments require centralized government approval and transparency. BBB also advises on strategies for optimal performance and capital raising in PSBs, in line with government reforms to ensure effective professional management of public sector banks.

IASCODEX · Answer

Option B: Reserve Bank of India

IASCODEX · Answer

Option C: Union Ministry of Finance

IASCODEX · Answer

Option D: Management of concerned bank