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NEW DELHI : The finance ministry is working to expand and relaunch the Banks Board Bureau (BBB) by bringing in more representatives from the insurance sector, two people aware of the matter said. The move aims to legally empower the body to recommend candidates for public sector insurers, and accelerate top-level hiring at all state-run financial institutions.
The finance ministry plans to identify new members, restructure the bureau, and refer the new names to the appointments committee of the cabinet (ACC) in a couple of months, the people cited above said. The revamped BBB may also get a new name to indicate its remit over a wider set of financial institutions, the people said on condition of anonymity.
A revamp of the BBB will enable it to recommend full-time appointments at financial institutions where the current executives are given additional charge through interim arrangements.
The revamp is, in part, pushed by a Delhi high court order last year, which observed that the bureau was not a competent body to recommend appointments at PSU general insurers, and held that circulars enabling BBB to select general managers and directors of PSU insurers were not legally valid.
Also, there is a pending case in the Delhi high court where an executive at a public sector insurer has challenged the appointment of the chairman and managing director of United India Insurance selected by BBB. Pending clarity on these matters, appointments by BBB have been suspended.
With the body’s extended two-year term ending on 10 April, recruitments can restart only when a new body is in place. The government is, therefore, looking to not only expand the earlier body but also rename it and give it a fresh mandate for appointments.
Questions emailed to the finance ministry and secretary, financial services remained unanswered till press time.
BBB was formed in 2016 to select executive directors, and managing directors and chief executives of state-run banks. It has been selecting directors and chairmen and managing directors of PSU general insurance companies since 2018.
The government is looking to restructure the operations of its general insurance companies, wherein stronger players would be consolidated and weaker ones would be allowed to restore their financial health before being sold.
In the Union budget 2021-22, the government had announced its intent to privatize one general insurer and two public sector banks.
It has also notified the General Insurance Business (Nationalisation) Amendment Act 2021 to facilitate this, by allowing the government to pare its stake in state-owned general insurers below 51%.
Regular appointments at these companies are expected to accelerate the process of consolidation and disinvestment.
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