The Appointments Committee of the Cabinet (ACC) has approved a government resolution for establishing the Financial Services Institutions Bureau (FSIB) in place of the Banks Board Bureau (BBB). The FSIB will now select the chiefs of public sector banks and insurance companies.
The selection process of top officials of public sector insurance companies was in limbo in the wake of the Delhi High Court decision to strike down the power of BBB to select directors and chiefs of PSU insurers.
The ACC has also approved the appointment of Bhanu Pratap Sharma, former Chairman, BBB, as initial Chairperson of FSlB for a term of two years from the date of notification of government resolution or until further orders, according to a note issued by the Department of Personnel & Training to the Department of Financial Services (DFS).
Other members of the FSIB are Animesh Chauhan, former Chairman and Managing Director, Oriental Bank of Commerce; Shailendra Bhandari, former MD & CEO of ING Vysya Bank and ICICI Asset Management Company; and Deepak Singhal, former ED, RBI in-charge of departments of corporate strategy and budget, corporate services and human
resource.
The new framework was proposed by the DFS. The Cabinet also approved the guidelines for selection of General Managers and Directors (GMDs) of non-life insurance companies.
“The Department (DFS) shall first carry out necessary modifications in the Nationalised Banks (Management and Miscellaneous Provisions) Scheme of 1970/1980 (as amended) with the approval of Finance Minister, and then notify the Government Resolution for establishing FSIB as a single entity for making recommendations for appointments of WTD (Whole-time Director) and NEC (Non-executive Chairmen) in PSBs, PSIs and FIs and Guidelines for selection of GMDs in non-life insurance firms modelled on the guidelines set aside, while substituting references to BBB with FSIB,” the note said.
While deciding another case involving a general manger of a PSU insurer, the Delhi High Court had struck down the BBB’s power to select directors of PSU general insurance companies and the government has already implemented the verdict by cancelling all the appointments of the then serving directors who were selected by the BBB.
Inderjeet Singh, General Manager, New India Assurance (NIA), had gone to Delhi HC on the issue of appointment of Satyajit Tripathy (who is currently CMD, United India Insurance) by the government on the basis of recommendation of the BBB.
In view of Delhi HC’s earlier decision on the BBB and Singh’s pending case in the same court, the Finance Ministry was unable to use the BBB’s platform to select any new CMDs for the PSU insurance companies which it has been doing since 2018.
Meanwhile, NIA, the country’s largest general insurer, has been functioning without a regular CMD for almost last 100 days after Atul Sahai retired from the post in February end. The CMD post at Agriculture Insurance Company also fell vacant. With the delay in starting the selection procedures, the aspirations of some of the senior officials, who are in the race for the top job, are getting thwarted as they are nearing their retirement.
The BBB was originally set up in 2016 to select the CEOs and Executive Directors of public sector banks. However, the government later entrusted BBB to select the chiefs of insurance companies. With the government now clearing the FSIB, the selection process of chiefs of insurance firms is expected to take place in the coming weeks.
EDot: Looking ahead
With the government now clearing the FSIB, the selection process of chiefs of insurance firms is expected to take place in the coming weeks.
