Retired comptroller and auditor general Vinod Rai has been appointed chairman of the Bank Board Bureau, which the government has set up to help public sector banks in their management. The board, which will become functional from 1 April, will have three other part-time members. The government, which had announced the intention to set up the bureau a year ago, wants it to initiate reform measures in the banking sector. Apart from Rai, the other members of the bureau are former CMD of Bank of Baroda Anil Khandelwal, former joint MD of ICICI Bank H.N. Sinor and former MD & CEO of Crisil Rupa Kudwa. It will also have three full-time members – secretaries of financial services and public enterprises, besides an RBI deputy governor. The finance ministry had earlier said the autonomous bureau will improve the governance of public sector banks, will recommend for selection of heads of these banks and other financial institutions and help banks in developing strategies and capital raising plans. The choice of Rai as the chairman has come under criticism by some of the opposition parties, who claim it is a violation of Article 148(4) of the Constitution as the CAG shall not be eligible for further office either under the government of India or under the government of any state after he has ceased to hold his office. The government has, however, denied any violation of any law and pointed out to precedents in the past.
