Correct Option
The Banks Board Bureau (BBB) was constituted in 2016 as an autonomous body to improve the governance of Public Sector Banks (PSBs). Its primary mandate included recommending individuals for appointment as Whole-time Directors and Non-Executive Chairmen in PSBs. The BBB functioned under the administrative purview of the Department of Financial Services, Ministry of Finance.
Incorrect Options
The Reserve Bank of India (RBI) is the central banking institution responsible for regulating monetary policy and supervising the banking sector. It does not directly select the Chairmen of public sector banks.
While the Union Ministry of Finance is the administrative ministry for public sector banks, the direct responsibility for recommending top management appointments, including Chairmen, was vested in the Banks Board Bureau at the time the question was asked. The Ministry approves the recommendations made by the BBB.
The internal management of a concerned public sector bank does not possess the authority to appoint its own Chairman. Such appointments are made by external bodies to ensure transparency, accountability, and adherence to governance standards across PSBs.