Prime Minister Narendra Modi has approved the proposal of the Department of Financial Services (DFS), Ministry of Finance for the constitution of the Banks Board Bureau.

The Bureau, which was announced in the last Budget by Finance Minister Arun Jaitley, will be headed by former Comptroller and Auditor General of India Vinod Rai.

Apart from Rai, the Bureau will comprise former Bank of Baroda chairman Anil K. Khandelwal, former joint managing director of ICICI Bank HN Sinor and former Crisil CEO Rupa Kudwa.

The members are appointed for a period of two years from the date of notification or until further orders, whichever is earlier.

The Bureau will assist the government search and select heads of PSU banks, strategise fund raising plans via innovative financial methods and instruments. BBB will also steer strategy discussion on consolidation based on the requirement.

Government wants to encourage Bank Boards to restructure their business strategy and also suggest way forward for their consolidation and merger with other banks if it is win-win for both, the Finance Ministry has said.

The Bureau may immediately be tasked with helping PSU banks tackle the Rs 8 lakh crore stressed assets. (PTI)