New Delhi, Mar 21 (IANS): The Banks Board Bureau headed by former CAG Vinod Rai has sought a wider mandate and a greater organic link with the government to provide greater utility on matters of governance and performance of public sector banks (PSBs).

In a compendium of recommendations published on its website, the Bureau sought from the government the mandate to engage with various stakeholders and offer advice to ensure that the PSB consolidation is least disruptive.

Seeking dialogue with the Finance Ministry, it said that without a greater interaction with the Ministry, the Bureau was merely functioning as an appointment board.

"If the government does indeed desire to make the Bureau address issues of governance around PSBs in a holistic manner and make its output effective, there is need for an organic relationship between the government and the Bureau," it said.

The Bureau added that it had made various recommendations to address the root cause of the challenges presently faced by the PSBs but was not aware of the progress made in that regard and that there had been no further engagement with government.

It said that India now deserved a public sector banking system which could offer a long term sustainable growth rate "rather than a public sector which amplifies the excesses of the credit boom with extreme risk aversion during credit bust and the attendant reliance on the tax payer's funds".

"To make this happen requires reworking of nearly five decades of institutional structures and processes which was put in place with the nationalisation of banks.

"It is very much in the realms of possibility to rework the same while the government continues to retain at least 51 per cent of the shareholding in PSBs recognising their strategic importance in India's developmental framework," it said.

To work in that direction, the Bureau sought the mandate to provide an independent feedback to the Finance Minister at least on a half yearly basis on the degree of implementation of its various recommendations related to governance, reward and accountability framework.

"In order to provide the independent feedback, the Bureau will engage with the boards of PSBs, the Department of Financial Services and the regulatory and supervisory functions of the Reserve Bank of India," it said.

It also sought the mandate to present its quarterly assessment to the Finance Minister on the relative performance, the respective capital assessment and growth assessment of each public sector bank.

"These mandates are being suggested to further reinforce and institutionalise the zero interference policy of the government," it said.

In a letter dated July 27, 2017, the Bureau sought a meeting with Finance Minister Arun Jaitley to discuss these matters and it was still awaiting that meeting.