Ex-CAG Vinod Rai Appointed First Chairman of Banks Board Bureau

PM Modi approved the Banks Board Bureau and appointed former CAG Vinod Rai the first Chairman.

Ex-CAG Vinod Rai to head Banks Board Bureau. (Photo Courtesy: Youtube/NDTV)

Prime Minister Narendra Modi has approved the proposal of the Department of Financial Services for the constitution of the Banks Board Bureau, a body set up to advise the government on top-level appointments at public sector lenders and to address the bad loans problem, among other issues.

Former CAG Vinod Rai has been appointed the first Chairman of the Banks Board Bureau. Rai was the Comptroller and Auditor General between January 2008 and May 2013, during which a number of CAG reports led to various scams, including in the telecom and coal sectors, coming to light. Apart from Rai, ICICI Bank’s former Joint Managing Director HN Sinor, Bank of Baroda’s former CMD Anil K Khandelwal, and rating agency CRISIL’s former chief Rupa Kudwa have also been appointed as members.

There were no immediate comments from Rai, who is currently in Singapore. The bureau has been set up at a time when public sector banks are grappling with a huge problem of bad loans with their collective gross NPAs (Non Performing Assets) amounting close to Rs 4 lakh crore.

The bureau will give recommendations on the appointment of directors in public sector banks, and advise on ways to raise funds and mergers and acquisitions to the lenders. There are 22 state-owned banks in India including SBI, IDBI Bank and Bhartiya Mahila Bank.

The Banks Board Bureau was earlier proposed by the government as a body of eminent professionals and officials, which will replace the Appointments Board for the appointment of Whole-time Directors as well as non-Executive Chairman of PSBs. The bureau will search and select heads of public sector banks and help them develop differentiated strategies of capital raising plans to innovative financial methods and instruments. It would also be responsible for the selection of non-executive heads and non-official directors on the boards.

Besides, the body will also steer strategy discussion on consolidation based on the requirement. The government wants to encourage bank boards to restructure their business strategies, and also suggest ways forward for their consolidation and mergers with other banks.

(With inputs from PTI)