News Excerpt: 

FSIB, the headhunter for directors of state-owned banks and financial institutions, has recommended the name of IFCI MD as SIDBI head.

When the Bank Board Bureau(BBB) was brought into force in April 2016, it was envisaged as a body that would efficiently corporatise and make government entities function like private players, but it didn’t make much headway on that front.

About Financial Services Institutions Bureau

• It’s a government body set up under the Department of Financial Services. 
• It replaced the BBB, which had been declared an incompetent authority, and was put in place with the approval of the Appointments Committee of the Cabinet, headed by the prime minister."
• The board will be entrusted with making recommendations for the appointment of full-time directors and non-executive chairman of state-run financial services institutions.
• It would also issue guidelines for selecting general managers and directors of public sector general insurance companies. 
• While its main task is to play the role of head-hunter for the state-owned financial services entities, the board will also be involved in formulating and developing business strategies for state-run banks and help them in their fund-raising plans. 

Structure: 

• The Financial Services Institutions Bureau would be headed by a chairman, a central government nominee. 
• The board would comprise 
• The Secretaries of the  Department of Financial Services(DFS), 
• The chairman of Insurance Regulatory and Development Authority of India(IRDAI), 
• A deputy governor of the RBI. 
• Additionally, it will have three part-time members who are experts in banking and three more from the insurance sector.

The functions of the Bureau as outlined in the Clause 2 of the Government Resolution are 

• To recommend persons for appointment as whole-time directors (WTDs) and non-executive chairpersons (NECs) on the Boards of Directors in Public Sector Banks, financial institutions and Public Sector Insurers (hereinafter referred to as “PSBs”, “FIs” and “PSIs” respectively);
• To advise the Government on matters relating to appointments, transfer or extension of term of office and termination of services of the said directors;
• To advise the Government on the desired management structure at the Board level for Public Sector Banks (PSB), Financial Institutions (FI), and Public Sector Insurers (PSI)
• To advise the Government on a suitable performance appraisal system for WTDs and NECs in Public Sector Banks (PSB), Financial Institutions (FI), and Public Sector Insurers (PSI)
• To build a databank containing data related to the performance of PSBs, FIs and PSIs;
• To advise the Government on formulation and enforcement of a code of conduct and ethics for whole-time directors in PSBs, FIs and public sector insurers (PSIs);
• To advise the Government on evolving suitable training and development programmes for management personnel in PSBs, FIs and PSIs;
• To help Public Sector Banks (PSB), Financial Institutions (FI), and Public Sector Insurers (PSI) in terms of developing business strategies and capital raising plan etc.;
• To carry out such a process and draw up a panel for consideration of competent authority for any other bank, financial institution or insurer for which the Government makes a reference, after consultation with the regulator concerned with that bank, financial institution or insurer.

 FSIB’s mandate

• The primary role of FSIB is to identify manpower capabilities and ensure proper selection of talent for senior positions at financial institutions owned by the government. 
• With FSIB, the intent is to go beyond the man-manager role and assist the government in formulating a code of conduct and ethics for whole-time directors in these entities. 
• It would also monitor and assess the performance of public sector banks, government-owned financial institutions and insurance companies.