Arun Jaitley met Vinod Rai several times, say government sources

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New Delhi | Published: March 22, 2018 5:21:18 AM

Refute BBB chief’s charge that a request to meet FM, made on July 26, still pending


Finance minister Arun Jaitley is learnt to have met Banks Board Bureau (BBB) chief Vinod Rai on a number of occasions, the last one being earlier this month, and discussed banking reforms, official sources told FE, seeking to refute charges that the ministry didn’t actively engage the BBB.

In a report of its recommendations for reforms in public sector banks (PSBs), made public on Monday, the BBB said the department of financial services under the finance ministry had been sitting over many of its suggestions and that a request for a meeting with Jaitley, sought on July 26 last year, was still pending.

“The bureau, as a body of experts on public sector banking, would be able to provide greater utility to the finance minister on matters relating to the governance and performance of PSBs, if there were to be greater organic linkage and dialogue with the finance ministry. At present, the body is merely functioning as an appointment board,” it said.

The report, which highlighted the work done by the BBB in the past two years, was made public just 10 days before the term of all the current BBB officials expires on March 31. The report also came amid intense public scrutiny over the functioning of PSBs following the $2-billion fraud at Punjab National Bank.

“The finance minister has met Rai on a number of occasions since last July, both formally and informally,” said an official source. Separately, another official said the DFS has also engaged the BBB through official communications on a number of occasions, adding that there was “never a communication breakdown between the BBB and the DFS”. However, the official didn’t comment on specific recommendations made by the BBB and whether the government is going to implement them. “Discussions on these issues are still on,” he said.

The BBB has sought wider mandate from the government, including advising the Centre on consolidation of the PSBs. Rai’s comments followed the statements of the Reserve Bank of India governor, seeking more powers to deal with frauds in the banking system.

To usher in governance reforms in PSBs, the government had set up the BBB in 2016, headed by former comptroller and auditor general Rai, on the recommendations of the PJ Nayak committee.

Apart from Rai, the BBB comprises public enterprises secretary Seema Bahuguna, Reserve Bank of India deputy governor NS Vishwanathan, former ICICI Bank joint managing director HN Sinor, former Crisil chief Roopa Kudva, former Bank of Baroda chief Anil K Khandelwal. DFS secretary Rajiv Kumar is the ex-officio member of the board.

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