Banks Board Bureau is likely to be a six-member board comprising former CMDs of banks and financial services sector experts. It will be headed by Secretary, Department of Financial Services. There are 22 state-owned banks in India including SBI, IDBI Bank and Bhartiya Mahila Bank.

"The Bureau should be hopefully in place in the next 3-4 months after it is cleared by Appointments Committee of the Cabinet (ACC) headed by Prime Minister Narendra Modi," said Hasmukh Adhia(Secretary) Department of Financial Services Secretary.

Once in place, BBB will search and select heads of public sector banks and help them develop differentiated strategies of capital raising plans to innovative financial methods and
instruments, he said. It would also be responsible for selection of non-executive chairman and non-official directors on the boards, he said.

Besides, BBB will also steer strategy discussion on consolidation based on the requirement, Adhia added.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 said in a statement recently.

Last week, Finance Minister Arun Jaitley in his Budget speech had announced setting up the autonomous Banks Board Bureau for helping lenders raise capital for meeting expansion
needs.Proposed BBB is part of overall strategy for restructuring of public sector banks and a step towards establishing a holding and investment company for lenders.

This issue was discussed extensively at the Gyan Sangam addressed by Modi in the first week of January.During the two-day bankers' retreat, heads of financial institutions have suggested the creation of Bank Investment Committee (BIC) and transfer of the government's investment in
banks to BIC.

Creation of BIC would over the time enable the government to reduce ownership to below 51 per cent and help banks generate capital for growth.In December, the government decided to permit public sector banks to raise up to Rs 160,000 crore from capital markets by diluting government holding to 52 per cent in phases so as to meet Basel III capital adequacy norms.Public sector banks alone require Rs 2.40 lakh crore by 2018 to meet global Basel III norms.

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