Target 30+ in General Awareness: Financial Services Institutions Bureau

Target 30+ is series of static awareness in context of current affairs. This will support your preparation  along with the power capsule provided by our team. In this article we are discussing about Financial Services Institutions Bureau (FSIB)

The Financial Services Institutions Bureau (FSIB), will replace the Banks Board Bureau (BBB). Former BBB chairman Bhanu Pratap Sharma has been selected to head the FSIB for two years or until further orders. FSIB was established on 1 July 2022.

What are the functions of Financial Services Institutions Bureau (FSIB)?

1. The FSIB will advise the government on a suitable performance appraisal system for whole-time directors and non-executive chairmen of the state-run financial services institutions. 
2. It will build a data bank relating to the performance of public-sector banks (PSBs), FIs and insurance companies. 
3. It will advise the government on the “formulation and enforcement of a code of conduct and ethics for whole-time directors” in these institutions. 
4. The FSIB will even help these state-run banks, FIs, and insurers in developing business strategies and capital raising plans, etc.

What constitutes Financial Services Institutions Bureau (FSIB)?

1. A chairperson nominated by the central government
2. The secretaries of the departments of financial services and public enterprises
3. Chairman of the Insurance Regulatory and Development Authority of India
4.  A deputy governor of the Reserve Bank of India
5. There will be three members with knowledge of banks and other financial institutions
6. Three more with knowledge of insurance

How chairman will be selected?

FSIB chairman and the three members handling affairs relating to banking and financial institutions will be selected by a search committee that will comprise the governor of the Reserve Bank of India (RBI) and the secretaries of the departments of financial services and personnel and training (or such other secretary as may be approved for this purpose by the Appointments Committee of the Cabinet). Similarly, the part-time members relating to the insurance sector would be chosen by the chairman of the IRDAI and the secretaries of the departments of financial services and personnel and training.

Why is FSIB replacing BBB?

• The Delhi High Court struck down the BBB’s power to select directors of the public sector (PSU) general insurance companies in 2021.
• The government started implementing the verdict by canceling all appointments of then-serving BBB-selected directors.
• After the verdict, the selection of top officials of PSU insurance companies was put on hold.

What is Bank Board Bureau (BBB)?

The Banks Board Bureau (BBB) has its genesis in the recommendations of ‘The Committee to Review Governance of Boards of Banks in India, May 2014 – P. J. Nayak committee.

Formation:

• The government, in 2016, approved the constitution of the BBB to make recommendations for the appointment of whole-time directors as well as non-executive chairpersons of Public Sector Banks (PSBs) and state-owned financial institutions.
• It was an autonomous recommendation body.
• The Banks Board Bureau was a public authority as defined in the Right to Information Act, 2005.
• The Ministry of Finance has the final decision-making authority on the appointments in consultation with the Prime Minister’s Office.

Answer the following expected questions in the comment section:

1. Who is the chairman of FSIB?
2. How many members are there in FSIB?
3. When BBB was constituted?

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