Under fire for soaring bad loans of banks, the government announced setting up of a Bank Board Bureau just a day ahead of Budget, thus fulfilling last year’s commitment.
Former CAG Vinod Rai will be its new chairman. Anil Khandelwal, former chief of the public sector Bank of Baroda, H N Sinor, ICICI Bank’s former joint managing director and Rupa Kidwa, former chief of CRISIL, will be members.
Besides recommending appointment of directors in public sector bank, the board will advise on ways of raising funds and dealing with stressed assets of public sector banks.
It will act as a link between the government and banks and strive to limit political interference in the day-to-day functioning of the lenders.
“As a first step towards a bank holding company that will hold all government investments in public sector banks, we had proposed a Bank Board Bureau and its structure will be announced,” Finance Minister Arun Jaitley had said late last year after the Cabinet cleared the BBB.
Banks require Rs1,80,000 crore in the next four years to meet their capital requirements. The government will provide Rs 70,000 crore to them, the balance they are expected to raise from the market.
The bank bureau is also expected to help lenders raise capital from the market.Rai, who was recently named as a recipient of Padma Bhushan award was the CAG from 2008-2013, during which he exposed the 2G and coal sector scams.