Central bank warns errant directors, CEOs of PCBs
Wednesday, 13 May 2009
Siddique Islam
Bangladesh Bank (BB) has expressed concern over irregularities committed by a section of directors as well as chief executive officers (CEO) of some private commercial banks (PCBs).
"It is a matter of concern and contrary to good governance," the BB said.
The central bank warning came against the backdrop of violation of the existing rules and regulations relating to bank management by some directors and CEOs of the PCBs.
"We've warned the directors and CEOs of the PCBs after identifying irregularities relating to responsibilities and accountabilities," a BB senior official told the FE Tuesday.
He also said the central bank will take action against the directors and CEOs who have not complied with the existing rules and regulations properly.
The central bank issued a circular in this connection Tuesday and asked chairmen and CEOs of PCBs to ensure the accountability, duties and responsibilities of the directors and CEOs.
"The circular must be placed in the next board of directors meeting of the PCBs for taking necessary measures in this regard," the BB official added.
On July 24, 2003 the central bank specified the areas of responsibilities and authorities of the board of directors, its chairman and CEOs to the PCBs in respect of its overall financial, operational and administrative policymaking and executive affairs, including overall business activities, internal control, human resources management and development.
The central bank, however, found that some directors and chairmen of the PCBs were taking part in daily affairs and interfering in the banks activities violating the existing rules and regulations.
Some of them also sit in the banks like regular officials besides attending board or committee meetings, the circular said.
Besides, some directors of the PCBs are using cars, telephones and office rooms of the banks, and engaging officials and employees in violation of the existing rules and regulations.
Under the existing rules, a chairman may be offered an office-room, a personal secretary or assistant, a telephone set, and a transport in the business-interest of the bank subject to the approval of the board.
The central bank has also identified that CEOs of some PCBs do not inform about violation of the existing bank company act and other rules and regulations to the central bank properly, the circular said.
The BB also said that some banks did not introduce policies relating to lending and risk management issues, human resources development, service rule and purchase and procurement.
Currently, 30 PCBs are operating their businesses across the country.
Bangladesh Bank (BB) has expressed concern over irregularities committed by a section of directors as well as chief executive officers (CEO) of some private commercial banks (PCBs).
"It is a matter of concern and contrary to good governance," the BB said.
The central bank warning came against the backdrop of violation of the existing rules and regulations relating to bank management by some directors and CEOs of the PCBs.
"We've warned the directors and CEOs of the PCBs after identifying irregularities relating to responsibilities and accountabilities," a BB senior official told the FE Tuesday.
He also said the central bank will take action against the directors and CEOs who have not complied with the existing rules and regulations properly.
The central bank issued a circular in this connection Tuesday and asked chairmen and CEOs of PCBs to ensure the accountability, duties and responsibilities of the directors and CEOs.
"The circular must be placed in the next board of directors meeting of the PCBs for taking necessary measures in this regard," the BB official added.
On July 24, 2003 the central bank specified the areas of responsibilities and authorities of the board of directors, its chairman and CEOs to the PCBs in respect of its overall financial, operational and administrative policymaking and executive affairs, including overall business activities, internal control, human resources management and development.
The central bank, however, found that some directors and chairmen of the PCBs were taking part in daily affairs and interfering in the banks activities violating the existing rules and regulations.
Some of them also sit in the banks like regular officials besides attending board or committee meetings, the circular said.
Besides, some directors of the PCBs are using cars, telephones and office rooms of the banks, and engaging officials and employees in violation of the existing rules and regulations.
Under the existing rules, a chairman may be offered an office-room, a personal secretary or assistant, a telephone set, and a transport in the business-interest of the bank subject to the approval of the board.
The central bank has also identified that CEOs of some PCBs do not inform about violation of the existing bank company act and other rules and regulations to the central bank properly, the circular said.
The BB also said that some banks did not introduce policies relating to lending and risk management issues, human resources development, service rule and purchase and procurement.
Currently, 30 PCBs are operating their businesses across the country.