NBFIs to follow systems in banks

FE Team | Published: September 27, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

Siddique Islam
The Bangladesh Bank (BB) has decided to outline the specific responsibilities of the board of directors and the chief executive officer (CEO) of the non-banking financial intuitions (NBFIs) as it is in the case of commercial banks.
The central bank will issue a directive today (Thursday) explaining the responsibilities of the board of directors and the CEOs of the NBFIs to ensue good governance in the country's non-banking institutions.
"We have already finalised the directives in this connection that will specifically demarcate the responsibilities of the board of directors and the CEO of the NBFIs," Senior Executive Directors of the BB Murshid Kuli Khan told the FE Wednesday.
He also said that it has been done to bring in good corporate governance in the NBFIs.
Under the new directives, the CEO will be responsible for day-to-day affairs of the NBFIs while the board of directors will deal with policy matters to bring dynamism in the sector.
The board of directors shall specifically delegate the power of sanctioning loan to the CEO and his subordinate executives as much as possible. No director, however, shall interfere, directly or indirectly, into the process of loan approval.
On the other hand, in terms of the financial, business and administrative authorities vested in him by the board, the CEO shall discharge his/her own responsibilities. He or she shall remain accountable for achievement of financial and other business targets by means of business plan, efficient implementation thereof and prudent administrative and financial management.
The CEO shall ensure compliance of the Bank Companies Act, 1991 and/or other relevant laws and regulations in discharge of routine functions of the bank.
The CEO shall report to Bangladesh Bank of issues violative of the Bank Companies Act, 1991 or of other laws/regulations and, if required, may apprise the board post facto.