Mission Indradhanush

Introduction

• In order to address the problems that Public Sector Banks are facing, the Indian government launched “Mission Indradhanush,” a seven-pronged effort. 
• Mission Indradhanush attempts to improve the public sector banks’ operations so that they can compete with private sector banks.

Components of Mission Indradhanush

• Appointments: Separation of the essential positions of Chief Executive Officer (CEO) and Managing Director (MD) to minimize power concentration and smooth bank operations. Induction of talent from various private sectors into public banks. 
• Bank Boards Bureau (BBB): The PSBs (Public Sector Banks) Appointments Board would be replaced by the Bank Board Bureau (BBB). It would provide advice to banks on things such as raising capital, mergers and acquisitions, and so  on. BBB will have 3 ex-officio members and 3 expert members in addition to the chairman.
• Capitalization: Capitalization of banks by inducing Rs. 70,000 crores in the next four years due to rising NPAs and the necessity to meet the provisions of the Basel III norms. 
• De-stressing: Solving problems arising in the infrastructure sector in order to check the stressed assets in the banks. 
• Empowerment: Providing better flexibility and autonomy to PSBs in hiring manpower.  
• Framework of Accountability: New performance indicators would be used to assess the performance of banks. Quantitative indicators such as growth, NPA management, diversification, return on capital, and financial inclusion. Qualitative parameters such as asset quality improvements, human resource efforts, and so on. 
• Governance Reforms: Gyan Sangam meetings between government officials and bankers to resolve banking sector challenges and set a course of action for the future.