Bank directorship is now tied by rules that disqualify below-30s, loan defaulters and convicted offenders from gracing seats on a bank-company board, according to a central-bank regulation.
The Bangladesh Bank Sunday issued a circular-purportedly in sequence with financial-sector cleanup drive-fixing the minimum age for becoming a bank director that will not be below 30.
The 24-page eligibility policy, issued by the Banking Regulations and Policy Department of the Bangladesh Bank (BRPD), also stipulates in detail the duties and responsibilities of bank directors.
People familiar with the development, meant for a purge of gathered wrongs in the banking sector, said that there are many instances where director's age was found even at 22.
About the qualifications of a bank-company director it says the person must have at least 10 years of management or business or professional experience.
On experiences of director, the circular says no work experience shall be taken into account until a person attains the age of 18 (eighteen) years.
"The person concerned cannot be convicted of a criminal offence or has not been or is not involved in any forgery, financial crime or other illegal activities," it is stated.
Also a person interested in becoming a director of a bank company should not be associated with any company or institution whose registration or licence has been cancelled or wound up.
"He/she will not be in default for any loan taken from any bank or financial institution in his own name or under the name of their organisation concerned that he/she belongs to."
A bank director cannot be employed as a director or adviser or consultant or in any other profitable position in any other bank company, financial institution, insurance company or any subsidiary company of such companies.
Apart from this, s/he cannot be an external auditor, legal adviser, adviser, consultant, or cannot hold any other profitable/lucrative position in the same banking company.
The regulatory policy on the qualifications of a director also states that he has not been declared bankrupt by a court at any time. He/she cannot be a tax defaulter either personally or on behalf of his sole proprietorship or partnership entities.
"If he/she is employed in any position in a bank, that person cannot become a director unless five years have passed by since the termination of his/her service."
A person who is declared a wilful defaulter by a banking company or by a financial institution formed under the Finance Companies Act 2023 "shall not be eligible to become a director unless five years have elapsed after being discharged from that list".
Banking reform is perceived part of financial reforms mentioned in a lending package on a US$4.7-billion loan Bangladesh is taking from the International Monetary Fund (IMF) to prop up its foreign-exchange reserves.
When asked, Chairman of the board of directors of Dhaka Bank Abdul Hai Sarker told the FE that his bank is fully compliant with the BB's latest restriction on a director's age.
He, however, appears sceptical about the desired outcome of the age bar.
"Actually, performance does matter, not the age, as a director of lower age even can deliver better," he said.
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