BB governor pledges to remove credit barriers tied to board defaulters

Bangladesh Bank Governor Md. Ahsan H. Mansur has assured the association of listed companies that obstacles to accessing credit facilities arising from the presence of defaulted nominated directors on company boards will be removed.

His assurance came on Tuesday at a meeting at the BB office with representatives of the Bangladesh Association of Publicly Listed Companies (BAPLC).

"The governor was very positive and at the meeting he instructed his officials to solve the problem very soon," said BAPLC President Riad Mahmud.

While listed companies themselves appoint directors to their boards, they also have directors nominated from other companies in compliance with securities rules.

But if an independent director does not have CIB (Credit Information Bureau) clearance, banks deny credit facilities to the company involved.

Similarly, if any representative from a defaulter company sits on the board of another company, the credit facility for the former gets rejected.

A similar problem arises when a director of a loss-making company sits on the board of another company of the same business group.

At the meeting, the BAPLC delegation urged the governor to take measures so that an individual's CIB-related issues do not affect a company's creditworthiness.

The association of listed companies also stressed the importance of greater use of the capital market for long-term financing needs to reduce banks' asset-liability mismatches.

BAPLC Vice President Syed Ishtiaq Ahmed and senior BB officials, among others, were present at the meeting.

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