Indian authorities are considering setting up a new governance body to oversee public sector banks in the wake of the Punjab National Bank loan scam, Firstpost reported May 21, citing sources.
The Prime Minister's Office is studying a proposal from the Economic Advisory Council to replace the Banks Board Bureau with a new body that would operate as a holding company. The council also reportedly suggested that the new body should report directly to the prime minister's office and not the finance ministry.
The suggestion comes amid criticism that the Banks Board Bureau was not able to adequately perform its duties because of interference from the finance ministry's Department of Financial Services.
The bureau was formed in 2015 to recommend nominees for top positions at government-owned banks. A government official told Firstpost that the Department of Financial Services had curtailed the bureau's powers since the beginning. A top officer at the finance ministry objected to that assertion, saying that the ministry's role in naming nominees is limited to scrutiny.
