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JS passes bill allowing four family members on bank board

FE Report | January 17, 2018 12:00:00

Parliament passed Tuesday legal amendments allowing four from a family to be bank directors at a time, amid strong opposition and criticisms from various quarters.

The passage of 'The Bank Companies (Amendment) Bill 2018' made the changes to 'The Bank Companies Act 1991' to make the new provision of multiple bank directorships from a single family.

Furthermore, the tenure of directors of private commercial banks has been extended for three consecutive terms to nine years from two terms following the amendments.

Finance Minister AMA Muhith moved the bill in the Jatiya Sangsad (JS) and it was passed by voice vote with Deputy Speaker M Fazley Rabbi Miah in the chair, according to news wires.

Placing the bill, the finance minister said the amendments would bring changes for fulfilling a longstanding demand of the private-bank owners.

However, the opposition and independent lawmakers led by Opposition Chief Whip Tajul Islam walked out of the House on protest and urged the Finance Minister to withdraw the bill and send it to the committee for eliciting public opinion.

They said the amendments will not protect the interest of the banking sector.

Experts and members of the country's civil society had earlier strongly opposed since the draft bill seeking amendments to the Bank Companies Act 1991 was approved by the Cabinet in May last year, saying it would widen family control on private commercial banks.

According to them, the government had initiated such amendments reportedly under pressure from bank owners.

Experts also observed that the move to amend law came at a time when there were widespread allegations of loan scams and irregularities against bank directors.

Previously, economists, politicians and experts on several occasions had said such amendments would widen control of a family over a bank, leaving depositors' interests at stake.

They also termed such changes 'contrary' to good governance in the banking sector which already suffered from bad loans and loan scams.

Earlier in the day, while talking to newsmen at his secretariat office, the finance minister said despite objections raised by various quarters, the proposed amendment to the Bank Companies Act 1991 would be passed.

"The cabinet has approved it. I have to get it through definitely," he said. Mr Muhith further said there was nothing to do with the objections from different quarters.

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