The Chairmen of public sector banks are selected by the

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Banks Board Bureau

Reserve Bank of India

Union Ministry of Finance

Management of concerned bank

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This question was previously asked in

UPSC IAS – 2019

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As part of banking reforms aimed at improving governance in Public Sector Banks (PSBs), the Government of India established the Banks Board Bureau (BBB) in 2016. One of the primary functions of BBB was to recommend persons for appointment as whole-time directors and non-executive chairmen in PSBs and public sector financial institutions. While the final appointment order is issued by the Ministry of Finance (on the recommendation of the Appointments Committee of the Cabinet), the selection process and recommendation for these top posts in PSBs are made by the dedicated body, BBB (which was later replaced by FSIB). Therefore, the selection is done by the Banks Board Bureau (or its successor body).

The selection of Chairmen (and other whole-time directors) of Public Sector Banks is done by the Banks Board Bureau (or its successor, FSIB).

The Reserve Bank of India regulates banks but does not appoint their chairmen. The management of the concerned bank does not select its own top leadership. While the Union Ministry of Finance is the administrative ministry and issues the final appointment order, the actual selection process for recommending candidates is undertaken by the specialized body (BBB/FSIB) to professionalize the appointments.

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