Centre to set up FSIB to make selection recommendations

Centre to set up FSIB to make selection recommendations

Subject :Economy

Section: Banking

Context: The Appointments Committee of the Cabinet (ACC) on June 30 approved a proposal by the department of financial services (DFS) to appoint former BBB chairman Sharma to head the new body for two years or until further orders

Financial Services Institution Bureau (FSIB):

• It act as a single entity for making recommendations for the appointments of whole-time directors, non-executive chairmen in public sector banks (PSBs), state-run non-life insurance companies and other financial institutions
• It replaces the Bank Board Bureau
• It will be headed by Bhanu Pratap Sharma former Bank Board Bureau Chairman for two years
• The Department of Financial Services (DFS) is now expected to carry out necessary modifications in the Nationalized Banks (Management and Miscellaneous Provisions) Scheme of 1970/1980.
• FSIB that would not just do the same job but also have a much larger, legally tenable mandate to carry out its functions without hiccups

Banks Board Bureau:

• It was formed in April 1, 2016,
• It is an autonomous body to search and select personages for the Board of PSBs, public sector FIs and PSIs, and recommends measures to improve corporate governance

Department of Financial Services (DFS)

• The mandate of the Department of Financial Services covers the functioning of Banks, Financial Institutions, Insurance Companies and the National Pension System.
• The Department is headed by the Secretary (FS) who is assisted by three Additional Secretary (AS), seven Joint Secretaries (JS), one Economic Advisers (EA) and a Deputy Director General (DDG).
• The Department of Financial Services (DFS) oversees several key programs/initiatives and reforms of the Government concerning the Banking Sector, the Insurance Sector and the Pension Sector in India. Initiatives and reforms relating to Financial Inclusion, Social Security, and Insurance as a Risk Transfer mechanism; Credit Flow to the key sectors of the economy/ farmers/ common man are some of the key focus areas being dealt by the Department.
• The key flagship schemes being currently run/managed by the Department include the Pradhan Mantri Jan Dhan Yojana (PMJDY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Mudra Yojana (PMMY), Atal Pension Yojana (APY), Pradhan Mantri Vaya Vandana Yojana (PMVVY) and the Stand Up India Scheme.
• The Department provides policy support to the Public Sector banks (PSBs), Public Sector Insurance Companies (PSICs) and Development Financial Institutions (DFIs) like National Bank for Agriculture and Rural Development (NABARD), Small Industries Development Bank of India (SIDBI), India Infrastructure Finance Company Ltd. (IIFCL), National Housing Bank (NHB), Export-Import Bank of India (EXIM Bank), Industrial Finance Corporation of India (IFCI).
• It also monitors the performance of these PSBs, PSICs and DFIs and undertakes policy formulation in respect of the Banking and Insurance Sector in India.
• This Department deals with legislative and policy issues pertaining to the concerned regulatory bodies i.e. the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority of India (IRDAI) and the Pension Fund Regulatory and Development Authority (PFRDA). DFS also deals with the legislative framework relating to debt recovery.
• The major Acts administered by the DFS that are being considered for rationalisation of compliances are: the Reserve Bank of India (RBI) Act, 1934; the Banking Regulation (BR) Act, 1949; the Insurance Regulatory and Development Authority of India (IRDAI) Act, 1999; the Insurance Act, 1938; the Credit Information Companies (Regulation) Act, 2005; and the National Housing Bank (NHB) Act, 1987.
• Matters relating to International Banking relations are also dealt by the Department.