BB asks PCB\\\'s chairman, MD to show cause

The central bank has issued show-cause notices upon both chairman and managing director (MD) of a private commercial bank (PCB) for allowing outsiders in the bank's board meeting.

The Financial Integrity and Customer Services Department of the Bangladesh Bank (BB) issued the notices Monday, officials said.

The BB also asked them to explain within 15 days as to why legal action would not be taken against them in this connection.

"We'll take the next course of action in line with the existing Banking Companies Act after receiving replies from them within the stipulated time," a BB senior official told the FE.

He also said the central bank issued the notices to the bank's chairman and MD on the basis of its special inspection report, submitted to the BB authorities concerned for taking necessary action.

The BB inspection team found seven persons coming out of the bank's board of directors meeting held in its board room on February 2 last. None of them was a board member.

"We've been informed that despite not being members of the board those people have been attending the board meeting regularly and they also intervene in the function of the bank, which is against the depositors' interest," another BB official said.

He also said the BB issued the notices to protect interest of depositors by ensuring good governance in the private commercial bank.

Neither chairman nor MD of the concerned bank could be reached for comments in this connection.

Earlier on December 26 last, the central bank asked all banks to bar non-directors from attending meetings of both board and board committees under any circumstances.

The BB had issued the warning after finding that non-directors had been present in board meetings of some banks.