The FSIB (Financial Services Institutions Bureau) has been reconstituted with former MSME Secretary S.C.L. Das as its Chairman. This note explains what the Bureau does and how it differs from the old Banks Board Bureau.
Why in News?
The government reconstituted the FSIB and appointed S.C.L. Das, former Secretary of the Ministry of MSME, as Chairman.
The Bureau recommends candidates for senior appointments in public sector banks and financial institutions.
FSIB: Key Facts for Prelims
- Nature: government body under the Department of Financial Services (DFS), Ministry of Finance; it is not a statutory or constitutional body.
- Set up in 2022, replacing the Banks Board Bureau (BBB).
- Mandate: recommends whole-time directors and non-executive chairpersons of PSBs, public sector insurers and financial institutions.
- It also advises on personnel management, performance appraisal and succession planning in these entities.
- Final approval of top appointments rests with the Appointments Committee of the Cabinet (ACC).
- Composition: Chairperson; Secretaries of DFS and the Department of Public Enterprises; Chairperson of IRDAI; a Deputy Governor of RBI; and part-time expert members from banking and insurance.
Background – Banks Board Bureau
- BBB was set up in 2016 under the Indradhanush plan for PSB reforms; Vinod Rai was its first chairman.
- In 2021 the Delhi High Court held that BBB was not competent to select general managers and directors of state-run general insurers, prompting a wider body – the new Bureau.
- Related: Nationalised Banks (Management and Miscellaneous Provisions) Scheme was amended to bring in the new Bureau.
- Other banking bodies: RBI regulates; DFS is the administrative ministry wing for PSBs; IRDAI regulates insurers.
- PSB governance reforms also include the Bank Investment Company idea (P.J. Nayak Committee, 2014) and consolidation of PSBs from 27 to 12.
Quick Revision Table: FSIB
| Point | Detail |
|---|---|
| Body | Financial Services Institutions Bureau |
| New Chairman | S.C.L. Das (former MSME Secretary) |
| Ministry | Finance – Department of Financial Services |
| Replaced | Banks Board Bureau (2016) |
| Covers | PSBs, public sector insurers, financial institutions |
| Final approval | Appointments Committee of the Cabinet |
Trap / Confusing Points: FSIB
| Confusion | Correct Position |
|---|---|
| The Bureau is a statutory body | No – it was created through executive/government notification |
| The Bureau makes final appointments | No – it recommends; ACC approves |
| The Bureau covers only banks | No – also public sector insurers and financial institutions |
| The Bureau works under RBI | No – under DFS, Ministry of Finance |
5 Practice MCQs on FSIB
1. The Financial Services Institutions Bureau (FSIB) replaced which body?
a. Banking Codes and Standards Board
b. Banks Board Bureau
c. Indian Banks’ Association
d. Board for Financial Supervision
Ans: B
Explanation: The new Bureau succeeded the Banks Board Bureau set up in 2016.
2. Who has been appointed the new Chairman of FSIB?
a. Bhanu Pratap Sharma
b. Vinod Rai
c. S.C.L. Das
d. Sanjay Malhotra
Ans: C
Explanation: Former MSME Secretary S.C.L. Das heads the reconstituted Bureau.
3. FSIB functions under:
a. Reserve Bank of India
b. Department of Financial Services
c. Department of Economic Affairs
d. NITI Aayog
Ans: B
Explanation: It is placed under DFS in the Ministry of Finance.
4. The final authority approving appointments of PSB chiefs is:
a. FSIB
b. RBI Board
c. Appointments Committee of the Cabinet
d. UPSC
Ans: C
Explanation: The Bureau recommends; the ACC approves.
5. Banks Board Bureau was set up under which reform plan?
a. Mission Shakti
b. Indradhanush
c. EASE
d. Narasimham-I
Ans: B
Explanation: BBB was part of the 2015 Indradhanush PSB reform plan.
Exam tip: Remember the chain for FSIB: the Bureau recommends → ACC approves; and it (2022) replaced BBB (2016).
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To know more about the Bureau’s reconstitution, Click here.
