What is the Financial Services Institutions Bureau (FSIB)?

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Overview:

The Financial Services Institutions Bureau (FSIB), the headhunter for directors of state-owned banks and financial institutions, recently recommended names for the posts of managing directors of Bank of Baroda and Bank of India.

About Financial Services Institutions Bureau (FSIB)

  • What is it? It’s a government body set up under the Department of Financial Services. 
  • It replaced the Bank Board’s Bureau (BBB) which was declared an incompetent authority.
  • Structure
  • FSIB would be headed by a chairman, a central government nominee. 
  • The board would comprise the Secretaries of the DFS, the chairman of IRDAI, and a deputy governor of the RBI. 
  • Additionally, it will have three part-time members who are experts in banking and three more from the insurance sector. 
  • Primary role of FSIB:
  • To identify manpower capabilities and ensure proper selection of talent for senior positions at financial institutions owned by the government.
  • It is entrusted with making recommendations for the appointment of full-time directors and non-executive chairman of state-run financial services institutions.
  • The final decision on the FSIB recommendation would be taken by the Appointments Committee of the Cabinet headed by the Prime Minister.
  • Other Mandates of FSIB: 
  • It would also issue guidelines for selecting general managers and directors of public sector general insurance companies. 
  • It will also be involved in formulating and developing business strategies for state-run banks and help them in their fund-raising plans.  
  • It would also monitor and assess the performance of public sector banks, government-owned financial institutions and insurance companies.  

 


Q1) What is the role of executive directors in a Banking Company?

The executive directors are appointed in a dual capacity− firstly , as the company’s employee, and second as members of the board of directors. Their responsibility is to bring an insider’s perspective while managing the day-to-day operations of the company.
Source: FSIB recommends names for MD posts of Bank of Baroda, Bank of India