Question 6 from UPSC CSE 2022 - Economics

Question

With reference to the 'Banks Board Bureau (BBB)', which of the following statements are correct?
1. The Governor of RBI is the Chairman of BBB.
2. BBB recommends for the selection of heads of Public Sector Banks.
3. BBB helps the Public Sector Banks in developing strategies and capital raising plans.
Select the correct answer using the code given below:

Accepted Answer

Correct Option: B. 2 and 3 only

Strategy: - Verify leadership facts: The RBI Governor is not the Chairman of the Banks Board Bureau (BBB), which quickly eliminates statement 1.
- Confirm BBB's primary function: Its headline role is the selection and recommendation of public sector bank heads, confirming statement 2.
- Acknowledge strategic support: The BBB also assists banks strategically, including with capital plans, validating statement 3.
- By eliminating statement 1, the correct choice is option B, encompassing statements 2 and 3.

Key Info: ## Banks Board Bureau (BBB)

The Banks Board Bureau (BBB) is an autonomous advisory body established by the Government of India in 2016 under the Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1980.

### Key Aspects:

-   **Establishment & Structure**
    -   Constituted by the Government of India in 2016.
    -   Operates under the Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1980.
    -   Its Chairperson is selected by the government.
    -   The Governor of the RBI is not the Chairman; however, a Deputy Governor of RBI serves as an ex-officio member.

-   **Primary Mandate**
    -   Recommends the selection and appointment of Board members (Chairmen and Whole Time Directors) for:
        -   Public Sector Banks (PSBs)
        -   Public sector insurance companies
        -   Other government-owned financial institutions
    -   Advises on the appointment, confirmation, extension, or termination of Board-level posts.

-   **Advisory Roles**
    -   Advises the government on:
        -   Evolving governance mechanisms
        -   Structure of Boards
        -   Performance appraisal systems
        -   Managerial code of conduct

-   **Strategic Assistance & Other Duties**
    -   Assists Public Sector Banks (PSBs) with:
        -   Developing business strategies
        -   Formulating capital-raising plans to enhance market positions and financial health.
    -   Maintains a database on bank performance.
    -   Supports policy suggestions for training, ethics, and leadership development within public sector banks.

The BBB was a crucial reform aimed at enhancing the professionalism, autonomy, and governance of PSBs in India.

Answer

Option A: 1 and 2 only

Answer

Option C: 1 and 3 only

Answer

Option D: 1, 2, and 3