BAB to recommend 2 directors from depositors for each bank soon
Friday, 21 March 2008
FE Report
The Bangladesh Association of Banks (BAB) will submit recommendations to the central bank within a week on appointment of two directors in each of the banks from their depositors.
The Bangladesh Bank (BB) sought opinions from the BAB, an apex body of the country's private commercial banks (PCBs), at a meeting held in the central bank Wednesday with BB Governor Salehuddin Ahmed in the chair.
BAB chairman Nazrul Islam Mazumder, former Chairman of the BAB and Administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBBCI) Syed Manzur Elahi and Deputy Governor of the BB Nazrul Huda were also present at the meeting.
The central bank is going to introduce a new rule that stipulates induction of two directors in each of the commercial banks from amongst their depositors.
On March 12 last, the BB published a public announcement seeking opinions from the people within the next two weeks to finalise the rule.
The meeting discussed different aspects of the appointment of directors, who will help the commercial banks function properly.
"We will submit our recommendations in this connection to the central bank within the next week," BAB Chairman Nazrul Islam Mazumder told the FE Wednesday after the meeting.
He also said the BAB will finalise the recommendations after consultations with their members.
A three-member high-powered committee, headed by BB governor, will select two directors for each commercial bank from among the depositors and appoint them for a three-year term, according to the announcement.
The committee may select the directors from the list to be provided by the banks concerned or from outside, whichever deems suitable.
Management of each bank will provide a list of 25 depositors to the committee in January every year for selection of their directors from depositors.
Under the existing rules, the board of directors of a commercial bank will consist of no more than 13 directors and their tenures will be restricted to two consecutive terms (three-year term each).
The Bangladesh Association of Banks (BAB) will submit recommendations to the central bank within a week on appointment of two directors in each of the banks from their depositors.
The Bangladesh Bank (BB) sought opinions from the BAB, an apex body of the country's private commercial banks (PCBs), at a meeting held in the central bank Wednesday with BB Governor Salehuddin Ahmed in the chair.
BAB chairman Nazrul Islam Mazumder, former Chairman of the BAB and Administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBBCI) Syed Manzur Elahi and Deputy Governor of the BB Nazrul Huda were also present at the meeting.
The central bank is going to introduce a new rule that stipulates induction of two directors in each of the commercial banks from amongst their depositors.
On March 12 last, the BB published a public announcement seeking opinions from the people within the next two weeks to finalise the rule.
The meeting discussed different aspects of the appointment of directors, who will help the commercial banks function properly.
"We will submit our recommendations in this connection to the central bank within the next week," BAB Chairman Nazrul Islam Mazumder told the FE Wednesday after the meeting.
He also said the BAB will finalise the recommendations after consultations with their members.
A three-member high-powered committee, headed by BB governor, will select two directors for each commercial bank from among the depositors and appoint them for a three-year term, according to the announcement.
The committee may select the directors from the list to be provided by the banks concerned or from outside, whichever deems suitable.
Management of each bank will provide a list of 25 depositors to the committee in January every year for selection of their directors from depositors.
Under the existing rules, the board of directors of a commercial bank will consist of no more than 13 directors and their tenures will be restricted to two consecutive terms (three-year term each).