New Delhi: The government on Thursday reconstituted the Banks Board Bureau under retired bureaucrat Bhanu Pratap Sharma as it looks to address human resource (HR) challenges at state-run banks and make top-level appointments.

However, the government has not widened the mandate of the bureau to include issues such as consolidation among state-run banks and asset quality as demanded by outgoing members.

The term of the first Bank’s Board Bureau headed by former comptroller and auditor general of India Vinod Rai ended on 31 March.

“Government renews commitment to not interfere in senior-level appointments in PSBs (public sector banks). Appoints new BBB (bank board bureau) with professionals with diverse expertise to select top management in PSBs," tweeted Rajiv Kumar, secretary, department of financial services, adding that the government will take reforms proposed by Banks Board Bureau under Rai—including those involving addressing human resource issues—forward.

The reconstitution of the bureau comes at a time when Indian banks and their senior management are under the scanner for weak processes and systems following the Rs12,636 crore scam at Punjab National Bank.

Sharma has held the positions of secretary, department of personal and training and secretary, health, in the Union government.

Other members of the bureau include investment banker Vedika Bhandarkar, who has headed the investment banking operations of Credit Suisse India and JPMorgan, and Pradeep Kumar, former managing director of State Bank of India. The founder managing director of rating agency Crisil, Pradip P. Shah, is the fourth member.

Sharma has wide experience in HR issues, Kumar told reporters on the sidelines of an event. He pointed out that it is important that the right persons are appointed to head state-run banks. “The government will be at an arm’s length in the appointments process. The BBB will do it. There is no interference from the government in the appointments and merit is the criterion," Kumar said.

Answering queries on the government not implementing the recommendations of the earlier bureau, Kumar said the recommendations relating to appointments have been implemented and the other recommendations relating to empowering the management by capacity building and addressing middle-level attrition will be taken forward by the newly constituted bureau.

The Banks Board Bureau had made a host of recommendations to streamline the appointment process, strengthen corporate governance practices and bringing in performance-linked compensation in banks.

Capital allocation among state-run banks was also a mandate of the bureau though the government did not consult it while finalizing its capital allocation plans.

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