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Q73 (IAS/2019) Economy › Money, Banking & Inflation › Banking regulation reforms Official Key

The Chairmen of public sector banks are selected by the

Result
Your answer: —  ·  Correct: A
Explanation

The correct answer is option A. The Banks Board Bureau (BBB) was set up in 2016 as an autonomous recommendatory body to improve the governance of Public Sector Banks (PSBs)[1], and the main function of BBB is to recommend the name of Heads of PSBs and financial institutions[1]. The Banks Board Bureau (BBB) is the body entrusted with the task of the selection of the chiefs of public sector banks and insurance companies[2]. This represented a shift from the existing system where appointments for top jobs at public sector banks were made through an appointments committee led by the Reserve Bank of India Governor[3]. Therefore, the RBI (option B) no longer has this role, while the Union Ministry of Finance (option C) and the management of the concerned bank (option D) do not directly select the chairmen of PSBs.

Sources
  1. [1] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > Banks Board Bureau > p. 191
  2. [2] https://indianexpress.com/article/business/banking-and-finance/dinesh-khara-to-take-over-as-sbi-chairman-today-6705818/
  3. [3] https://indianexpress.com/article/business/business-others/bank-board-bureau-to-consist-of-experts-one-finmin-representative/
How others answered
Each bar shows the % of students who chose that option. Green bar = correct answer, blue outline = your choice.
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Don’t just practise – reverse-engineer the question. This panel shows where this PYQ came from (books / web), how the examiner broke it into hidden statements, and which nearby micro-concepts you were supposed to learn from it. Treat it like an autopsy of the question: what might have triggered it, which exact lines in the book matter, and what linked ideas you should carry forward to future questions.
Q. The Chairmen of public sector banks are selected by the [A] Banks Board Bureau [B] Reserve Bank of India [C] Union Ministry of Finance…
At a glance
Origin: Books + Current Affairs Fairness: Moderate fairness Books / CA: 5/10 · 5/10
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This is a classic 'Reform Implementation' question. It rewards aspirants who track not just the problem (NPAs/Governance) but the specific institutional solution (BBB/Indradhanush) implemented by the government. It is a direct lift from standard economy chapters on Banking Reforms.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
Are the Chairmen of public sector banks in India selected by the Banks Board Bureau?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > Banks Board Bureau > p. 191
Presence: 5/5
“• Based on the recommendations of P.J. Nayak Committee, Banks Board Bureau (BBB) was set up in 2016 as an autonomous recommendatory body to improve the governance of Public Sector Banks (PSBs). • BBB was also one of the seven aspects of the Indradhanush plan of Government which deals with revival of PSBs. • The main function of BBB is to recommend the name of Heads of PSBs and financial institutions. Moreover, it also advises on ways of raising funds and dealing with the issue of stressed assets.”
Why this source?
  • Describes Banks Board Bureau (BBB) as an autonomous recommendatory body set up in 2016 to improve PSB governance.
  • Explicitly states the main function of BBB is to recommend the name of Heads of PSBs and financial institutions.
  • Recommendation of 'Heads' directly encompasses bank Chairmen.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 3: Money and Banking - Part II > P J NAYAK Committee > p. 129
Presence: 5/5
“This means that even if the Govt. will be majority shareholders in BIC, but it will not intervene in its working and BIC will select banks directors and top management. (And if required to preserve the autonomy of BIC, Govt. may reduce its ownership to less than 50% in BIC).• But since repealing of the Acts (1955, 1970) and establishment of BIC will take time, so for the time being Govt. can establish Banks Board Bureau (BBB) through an executive order and BBB will select and appoint directors/top management in public sector banks and other public sector financial institutions like NABARD/SIDBI/LIC etc.”
Why this source?
  • States that BBB will select and appoint directors/top management in public sector banks and other public financial institutions.
  • Frames BBB as the body responsible for choosing bank leadership, even if established initially by executive order.
Statement analysis

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Statement analysis

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Statement analysis

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SIMILAR QUESTIONS

IAS · 2022 · Q34 Relevance score: 3.77

With reference to the 'Banks Board Bureau (BBB)', which of the following statements are correct? 1. The Governor of RBI is the Chairman of BBB. 2. BBB recommends for the selection of heads for Public Sector Banks. 3. BBB helps the Public Sector Banks in developing strategies and capital raising plans. Select the correct answer using the code given below:

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With reference to the institution of Banking Ombudsman in India, which one of the statement is not correct?

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Dr. Urjit Patel, who has been appointed , recently as Governor of Reserve Bank of India, was holding which position immediately prior to this appointment ?