The central bank issued Wednesday a rule allowing the commercial banks to appoint two directors from among the depositors in line with the existing Bank Companies Act.
Under the new rule, the board of directors of a bank will submit proposal to the central bank seeking approval on appointment of the directors.
"The appointment will be effective after receiving approval from the central bank," the rule said, adding that the central bank, if necessary, might seek more names for appointment of the directors from the board of directors of the bank concerned.
"The new rule will help the banks to ensure their better management and transparency," Bangladesh Bank Governor Salehuddin Ahmed told reporters while speaking about the new rule for appointment of two directors from among depositors.
He also said such directors will come to the bank boards with an independent view, which, he said would help the banks improve their managerial efficiency.
The central bank issued a circular in this connection on the day and asked the banks for taking necessary measure to implement the rule immediately.
"We have formulated the rule on the basis of stakeholders', including bankers', opinions," a senior official of the Bangladesh Bank (BB) told the FE, adding that the directors to be appointed for a three-year term.
On May 29 last, the BB made a public announcement seeking fresh opinion from the people to finalise the rule.
The central bank said in its earlier announcement on March 12 last that a three-member high-powered committee, headed by BB governor, will select the two directors for each commercial bank from among the depositors and appoint them for a three-year term.
However, on April 6 last, the Bangladesh Association of Banks (BAB) sent a letter to the central bank raising objection to its move on appointment of two directors from among individual depositors in every bank.
On April 17 last, the central bank turned down the private commercial banks plea and asked them to submit fresh recommendations in this regard within two weeks.
On May 22 last, the central bank sought fresh proposals from the BAB to frame the modalities of selection of two directors from among depositors in each commercial bank.
Meanwhile, the Bangladesh Association of Banks (BAB) has welcomed the BB's new rule, saying that it will not only help protect the interest of the depositors but also improve banks' managerial efficiency.
"The central bank has formulated the rule through consultation with the BAB members," Vice-Chairman of the BAB Muhammad A (Rumme) Ali told the FE.
