Detailed Explanation:

Answer: Option 1 — Banks Board Bureau

The Chairman of public sector banks in India are selected by the Banks Board Bureau (BBB), an autonomous body established in 2016 based on the recommendations of the P.J. Nayak Committee Report (2014). The BBB is responsible for recommending candidates for appointments to the Boards of Directors and top management positions in Public Sector Banks (PSBs) and state-owned financial institutions, thereby bringing greater transparency and professionalism to the selection process.

📝 Short Notes: Banks Board Bureau

• Establishment: The Banks Board Bureau was established on 28th February 2016 as an autonomous body by the Government of India.
• Genesis: It was formed based on the recommendations of the P.J. Nayak Committee Report (2014) on governance reforms in PSBs.
• Key Functions: Recommends persons for appointment as Whole-Time Directors and Non-Executive Chairmen of PSBs; assists banks in developing strategies and capital-raising plans; evaluates performance of bank boards.
• Composition: The BBB comprises eminent professionals from banking and finance sectors, including former RBI Governors, bankers, and industry experts.
• Objective: To improve governance, enhance professionalism, and ensure merit-based selection in public sector banks and financial institutions.
• Status: The BBB functions as an autonomous body but provides recommendations to the government, which makes the final appointments.