Gulzar writes on this interesting development amidst series of other links/posts (check no 11).
India recently appointed bank panel – Bank Board Bureau – to select heads of India’s Public sector banks amidst huge hype as always. Gulzar says that it being just 5 months old is already undergoing mission creep:
The growth dynamics of the newly constituted Bank Board Bureau (BBB) in India may be a teachable example of how institutions can go astray. The BBB was notified in February 2016 primarily to “recommend for selection of heads of financial institutions”. The popular former Comptroller and Auditor General of India, Mr. Vinod Rai, was appointed its chairman.
After assuming charge, Mr. Rai has waxed on the bank bad assets resolution process, reassured that bank chiefs will not be questioned over the bad asset resolution decisions, and discussed consolidation of PSBs. I am confused. Is the BBB’s mandate so wide enough to cover all these complex regulatory issues? If BBB, which advises on appointments, assumes a role in operational management, then isn’t there a serious conflict of interest? If so, where do the BBB’s role end and the banking regulator’s begin?
Or is it a case of “Mission Creep” by BBB, a feature that, once the judiciary showed the way with its liberal interpretation of Public Interest Litigations (PILs), has come to characterize institutional development in India? The hyper-active media have obviously only been too eager to nudge a willing Mr. Rai into these transgressions.
It is something about this banking sector which keeps creating hype and noise. One is not tired of both giving news bytes or writing about them.
What leads to this creep? It is either due to lack of a well defined objective. Or it is due to appointment of individuals at helm who are seen as above the institution given the limited scope of the institution. What could be the case here?
As one was pondering over this creep/sweep, in came this news that BBB is now going to be busy pick bank heads. Perhaps it might just get on to its actual job now and avoid any such creeps..