Banks Board Bureau chairman Vinod Rai Monday said the board was given a “free hand” in appointment process and dismissed any lack of coordination with the government as the rapport was “total”. Amid reports suggesting that the board and the government were not on the same page on various issues, Rai emphasised that the coordination was to the extent that Finance Minister Arun Jaitley himself took him into confidence even when there was change of guard at two large public sector banks in May 2017.
The tenure of the BBB is coming to an end on March 31. The bureau started functioning from April 1, 2016 as an autonomous recommendatory body and has seven members, including the chairman. “The BBB in the last two years has done monumental work with support and cooperation of the RBI and the government along with secretaries to the government of India working as members to the BBB,” Rai told PTI in an interview.
Dismissing reports that there was lack of coordination between the board and the government, Rai said the rapport was total and that he often met Jaitley and received guidance from him.
The government never ever interfered in any appointment process and the bureau was given a total free hand, Rai said, adding that he even had the privilege of attending a meeting chaired by Prime Minister Narendra Modi on the banking sector.
Rai, the former Comptroller and Auditor General, said it was decided to collate all the work done by this bureau so that when the new BBB comes into being it would act as a base document for them. “This consolidated set of record or Compendium of Recommendations would come handy for the new BBB. This was created and put on the website but I could not see the finished document as I was away from the country,” he said.
Rai regretted the fact that an oversight in the 60-page compendium has been blown up to misleading headlines. “When it was put on the website unfortunately there were some misleading headlines with regard to letter written to the Finance Minister in July 2017 on which some suggestions were given,” he said.
Those suggestions were discussed with the Finance Minister and the Financial Services Secretary a number of times post that letter, he added. “I must have met the Finance Minister at least half a dozen times. Whenever I sought an appointment, I used to get the appointment to discuss various things. So formally, informally issues were discussed and taken forward,” he said.
Recalling an instance of close cooperation and coordination, Rai said the Finance Minister was so fair that he took him into the confidence even when the MDs of two large banks — Punjab National Bank and IDBI Bank — were replaced last year.
“So the rapport was total… in the Compendium there is a reference to the letter but that is much old and after that much water has flowed down. Eight months have past and much has built up after the letter,” he added.
On reforms initiated in the public sector banks (PSBs), Rai said it has been a path breaking decision to set up the BBB along the decision of P J Nayak Committee. For any government to say that it will distance the governance structure or the stake holding of the public sector banks away from the government and political interference is a very revolutionary step, Rai noted.
While observing that the decision was very well accepted across the world among the investors’ community, Rai said the government with the expert advise of the BBB professionalised the PSB boards, ensuring efficient delivery by state-owned lenders and appointment process was made objective and efficient.