The government's reported move to expand and relaunch the Banks Board Bureau (BBB) by roping in insurance sector experts is pragmatic and must be expedited. The extended term of BBB, which has streamlined appointments for top positions in public sector banks (PSBs), ended in April this year. But legal challenges hobble the headhunter body's remit to recommend the appointment of top insurers.
Last year, the Delhi High Court accepted the argument that BBB has no legal standing to appoint directors on the boards of public sector insurers. That leaves many appointments for senior management in a limbo. The largest state-owned insurer, New India Assurance, does not have a chief. This is a sorry state of affairs.
With the government looking to restructure the operations of its general insurers, it should swiftly legally empower BBB to recommend candidates. These companies must be steered by competent professionals to improve governance, management and underwriting discipline.
Encouraging lateral entry in senior positions will attract the best talent. Set up in 2016, BBB's role was also expanded to advise GoI on the extension or termination of services of the board of directors, develop succession plans for key positions, and formulate a code of conduct and ethics for bankers. This tied up with BBB's role to limit interference in banks by influence-peddling politicians.
As recommended by the PJ Nayak Committee, the government must distance itself from any governance functions and give complete functional autonomy to PSBs. A holding company for all PSBs still merits consideration. BBB can become its board. An overhaul of the remuneration structure of PSB senior executives to hold them to account is overdue.
Last year, the Delhi High Court accepted the argument that BBB has no legal standing to appoint directors on the boards of public sector insurers. That leaves many appointments for senior management in a limbo. The largest state-owned insurer, New India Assurance, does not have a chief. This is a sorry state of affairs.
With the government looking to restructure the operations of its general insurers, it should swiftly legally empower BBB to recommend candidates. These companies must be steered by competent professionals to improve governance, management and underwriting discipline.
Encouraging lateral entry in senior positions will attract the best talent. Set up in 2016, BBB's role was also expanded to advise GoI on the extension or termination of services of the board of directors, develop succession plans for key positions, and formulate a code of conduct and ethics for bankers. This tied up with BBB's role to limit interference in banks by influence-peddling politicians.
As recommended by the PJ Nayak Committee, the government must distance itself from any governance functions and give complete functional autonomy to PSBs. A holding company for all PSBs still merits consideration. BBB can become its board. An overhaul of the remuneration structure of PSB senior executives to hold them to account is overdue.
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