The Bank Boards Bureau (BBB) has evolved a Governance, Reward and Accountability Framework (GRAF) for public sector banks to make sure that they have the capability to compete successfully with private sector banks, small finance and payments banks, foreign banks and non-banking finance companies.
The GRAF incorporates a governance framework that integrates elements of organisational structure and processes to ensure high standards of corporate governance that has already been enunciated in the Companies Act, 2013, Banking Regulation Act, 1949, and Securities and Exchange Board of India (listing obligations and disclosure requirements) Regulations, 2015.
Further, the framework is guided by the latest global benchmarking on governance practices provided by the Basel Committee on Banking Supervisions guidelines on corporate governance principles for banks released in July 2015.
BBB, whose mandate is to appoint whole-time directors and engage with PSBs, has evolved a code of conduct and ethics which could be enforced across all PSBs to ensure the right behaviour and conduct.
The Bureau has also come up with compensation reforms so that best practices can be introduced in PSBs on the lines already prevalent in Central Public Sector Enterprises.
BBB has evolved a relative performance rating system to assess the performance of PSBs, its directors and employees; and performance evaluation system based on which decision making for the extension/termination of a whole-time director can be undertaken objectively.
Apart from fulfilling its mandate regarding appointments, later during the course of this financial year, the Bureau will be advising the Government on evolving suitable training and development programmes for management personnel in PSBs and will help banks to develop a robust leadership succession plan for critical positions that would arise in future