SCB boards to exercise full authority
Tuesday, 12 January 2010
Nazmul Ahsan
The Ministry of Finance (MoF) has decided to give more autonomy to three government -owned corporatised banks to help them compete with private commercial banks better, official sources said.
The autonomy will be given to the management of banks in areas of all kinds of promotions, recruitments and fixation of wages of their respective staff. The board of directors of three banks-Sonali bank ltd, Janata bank ltd and Agrani bank ltd will be given the authority to exercise the autonomy.
A high-level meeting, held recently at the MoF, has decided to strengthen three corporatised banks by giving more autonomy. Finance Minister AMA Muhith presided over the meeting, sources said.
According to the meeting decision, the respective board of the banks concerned will have now the authority to give promotion from the post of Deputy General Manager (DGM) to General Manager (GM).
Presently, a high-powered committee comprising members from the Bangladesh Bank and the MoF is authorised to finalise the panel of GMs for all state-owned banks after interviewing the bank's DGMs.
The meeting has also decided not to transfer the promoted GMs of a state-owned bank to another, which is now a common practice.
Furthermore, the board of respective banks will appoint their own managing directors or chief executive officers. The wage and package for the top boss of the bank will also be determined by the bank management itself, the meeting also decided.
The MoF will soon issue circular to three-banks concerned in this respect, sources said.
"We want to give more autonomy to three corporatised banks so that they become more professional in their banking activities,' a top official in the MoF told the FE.
The move, however, has raised questions about the necessity of establishing the Banking Division under the MoF. The Secretary Committee on Administrative Affairs has recently approved the establishment of the new division under the MoF.
It is learnt neither the Finance Minister nor the Secretary, Finance Division, was in favour of establishing the new Division. An influential group, led by a top bureaucrats has convinced the highest authority of the government to create the division.
They, however, said the move to grant more autonomy to public sector banks would obviously contribute to the strengthening of three-banks.
Earlier, the MoF abolished the Bankers' Recruitment Committee (BRC) and vested the authority to the respective state-owned bank boards for recruiting first and second class officers.
The BRC, headed by Bangladesh Bank (BB) Governor, was established in September, 2000 to recruit first and second class officers for 12 state-owned banks and financial institutions.
The committee has so far earned appreciation for its neutrality and fair practices in appointing bank officials, sources said.
According to the ministry order, the power to recruit bank officers has been vested to the respective bank boards. The board of directors of the bank will form a recruitment committee with the permission of MoF.
However, insiders said the latest instruction would pave way for recruiting bank officers having political connections and strong lobby.
Muhith on Sunday said three state-owned banks will have their own separate pay scale.
The Ministry of Finance (MoF) has decided to give more autonomy to three government -owned corporatised banks to help them compete with private commercial banks better, official sources said.
The autonomy will be given to the management of banks in areas of all kinds of promotions, recruitments and fixation of wages of their respective staff. The board of directors of three banks-Sonali bank ltd, Janata bank ltd and Agrani bank ltd will be given the authority to exercise the autonomy.
A high-level meeting, held recently at the MoF, has decided to strengthen three corporatised banks by giving more autonomy. Finance Minister AMA Muhith presided over the meeting, sources said.
According to the meeting decision, the respective board of the banks concerned will have now the authority to give promotion from the post of Deputy General Manager (DGM) to General Manager (GM).
Presently, a high-powered committee comprising members from the Bangladesh Bank and the MoF is authorised to finalise the panel of GMs for all state-owned banks after interviewing the bank's DGMs.
The meeting has also decided not to transfer the promoted GMs of a state-owned bank to another, which is now a common practice.
Furthermore, the board of respective banks will appoint their own managing directors or chief executive officers. The wage and package for the top boss of the bank will also be determined by the bank management itself, the meeting also decided.
The MoF will soon issue circular to three-banks concerned in this respect, sources said.
"We want to give more autonomy to three corporatised banks so that they become more professional in their banking activities,' a top official in the MoF told the FE.
The move, however, has raised questions about the necessity of establishing the Banking Division under the MoF. The Secretary Committee on Administrative Affairs has recently approved the establishment of the new division under the MoF.
It is learnt neither the Finance Minister nor the Secretary, Finance Division, was in favour of establishing the new Division. An influential group, led by a top bureaucrats has convinced the highest authority of the government to create the division.
They, however, said the move to grant more autonomy to public sector banks would obviously contribute to the strengthening of three-banks.
Earlier, the MoF abolished the Bankers' Recruitment Committee (BRC) and vested the authority to the respective state-owned bank boards for recruiting first and second class officers.
The BRC, headed by Bangladesh Bank (BB) Governor, was established in September, 2000 to recruit first and second class officers for 12 state-owned banks and financial institutions.
The committee has so far earned appreciation for its neutrality and fair practices in appointing bank officials, sources said.
According to the ministry order, the power to recruit bank officers has been vested to the respective bank boards. The board of directors of the bank will form a recruitment committee with the permission of MoF.
However, insiders said the latest instruction would pave way for recruiting bank officers having political connections and strong lobby.
Muhith on Sunday said three state-owned banks will have their own separate pay scale.