CEOs for Sonali, Janata selected
Monday, 26 November 2007
A Z M Anas
The caretaker government is set to name soon chief executives of Sonali Bank Limited and Janata Bank Limited, tagging their tenures with time-specific performance.
SA Chowdhury, chairman of Bangladesh Krishi Bank, and Aminur Rahman, the incumbent managing director of Sonali Bank, have been selected as chief executive officers (CEOs) of Sonali and Janata, the newly-created public limited companies, respectively, officials at the finance ministry said.
"Chief Adviser is expected to approve their appointment within a short time after signing of separate contracts with the new CEOs," an official told the FE Sunday.
The appointment of the chief executives, initially for a period of two years, will be subjected to "serious scrutiny", and their performance will be evaluated on a six-monthly basis, the officials noted.
The selection coincides with the finalisation of corporatisation process that has cleared the way for the two banks to operate as public limited companies (PLCs), thus empowering Bangladesh Bank (BB) to oversee their future operations.
"The new CEOs will have to strictly adhere to both 'quantitative' and 'qualitative' performance indicators as devised by the World Bank. The remuneration of the CEOs will be paid by the bank, too," a top central banker said.
Highly-placed sources familiar with the appointment said the new Sonali CEO will be obliged to downsize the bank's existing manpower to 13000, while his counterpart at Janata needs to do the same, retrenching as many as 2500 staffers.
Manpower retrenchment, profitability, reduction of non-performing loans, capital and provisioning shortfalls cut, rationalisation of bank branches and a significant cut back on expenditures are among the key performable indicators prepared by the World Bank.
The persons involved in the process pointed out that the new CEOs would have to report to the central bank as well as the finance ministry about the achievement of their targets on a six monthly basis.
"There're time-specific targets. The terms of reference (ToR) clearly spell out what the CEOs need to do in 30 days, 60 days or in a year. If they fail to achieve their targets, their contracts can be terminated by the banks' boards," a working group source told the FE.
According to the ToR, the CEOs are to review loans up above Tk 10 million within the first six months of their contracts and to provision against bad loans.
In addition, they have to submit a VRS (voluntary retirement scheme) plan to their respective boards within the first year of their contract period.
A total of 10 bankers, mostly former heads of nationalised commercial banks, submitted applications and of them, nine applicants appeared before the interview board, finance ministry officials said.
Bankers and analysts say both persons are former managing directors of nationalised banks whose performance was not up to the mark when they were in office.
Meanwhile, the finance ministry is on the look out for a chief executive officer of Agrani Bank and has issued a circular, seeking eligible candidates for the post.
The top post at Agrani Bank Limited, a public limited company, has remained vacant since September 30 when Abu Naser Bukhtear's contractual appointment expired.
The caretaker government is set to name soon chief executives of Sonali Bank Limited and Janata Bank Limited, tagging their tenures with time-specific performance.
SA Chowdhury, chairman of Bangladesh Krishi Bank, and Aminur Rahman, the incumbent managing director of Sonali Bank, have been selected as chief executive officers (CEOs) of Sonali and Janata, the newly-created public limited companies, respectively, officials at the finance ministry said.
"Chief Adviser is expected to approve their appointment within a short time after signing of separate contracts with the new CEOs," an official told the FE Sunday.
The appointment of the chief executives, initially for a period of two years, will be subjected to "serious scrutiny", and their performance will be evaluated on a six-monthly basis, the officials noted.
The selection coincides with the finalisation of corporatisation process that has cleared the way for the two banks to operate as public limited companies (PLCs), thus empowering Bangladesh Bank (BB) to oversee their future operations.
"The new CEOs will have to strictly adhere to both 'quantitative' and 'qualitative' performance indicators as devised by the World Bank. The remuneration of the CEOs will be paid by the bank, too," a top central banker said.
Highly-placed sources familiar with the appointment said the new Sonali CEO will be obliged to downsize the bank's existing manpower to 13000, while his counterpart at Janata needs to do the same, retrenching as many as 2500 staffers.
Manpower retrenchment, profitability, reduction of non-performing loans, capital and provisioning shortfalls cut, rationalisation of bank branches and a significant cut back on expenditures are among the key performable indicators prepared by the World Bank.
The persons involved in the process pointed out that the new CEOs would have to report to the central bank as well as the finance ministry about the achievement of their targets on a six monthly basis.
"There're time-specific targets. The terms of reference (ToR) clearly spell out what the CEOs need to do in 30 days, 60 days or in a year. If they fail to achieve their targets, their contracts can be terminated by the banks' boards," a working group source told the FE.
According to the ToR, the CEOs are to review loans up above Tk 10 million within the first six months of their contracts and to provision against bad loans.
In addition, they have to submit a VRS (voluntary retirement scheme) plan to their respective boards within the first year of their contract period.
A total of 10 bankers, mostly former heads of nationalised commercial banks, submitted applications and of them, nine applicants appeared before the interview board, finance ministry officials said.
Bankers and analysts say both persons are former managing directors of nationalised banks whose performance was not up to the mark when they were in office.
Meanwhile, the finance ministry is on the look out for a chief executive officer of Agrani Bank and has issued a circular, seeking eligible candidates for the post.
The top post at Agrani Bank Limited, a public limited company, has remained vacant since September 30 when Abu Naser Bukhtear's contractual appointment expired.