The New Nation - Internet Edition

Staff Reporter

Bangladesh Bank (BB) has asked the commercial banks, except foreign banks, to appoint two directors from among the depositors in their respective boards.

The central bank issued a circular in this regard yesterday which also delineates the guideline for the appointment, in line with the existing Bank Companies Act.

To qualify for the post a depositor will have to be highly educated in economics, banking or related fields. He or she must not be a service holder or director of any bank company, insurance company, financial institution or stock exchange.

S/he or her family members must not hold more than one percent share of the concerned bank and s/he will have to continue to deposit in the concerned bank after being appointed as a director there, says the circular.

Members of any political party, loan defaulters and tax defaulters will not be eligible to be a director, the BB circular says.

The central bank formulated the regulation on the basis of stakeholders' opinions, officials of the central bank said.

On May 29 last, the BB made a public announcement seeking fresh opinions from the people to finalise the rule of appointing two depositor directors.

Under the rule, the board of directors of a bank will submit proposal to the central bank seeing approval on appointment of the directors.

The appointment will be effective after receiving approval from the central bank. The central bank might seek more names for appointment of the directors from the board of directors of the bank concerned.

A three-member high-powered committee, headed by BB governor, will select the two directors for each commercial bank from among the depositors and appoint them for a three-year term.

Earlier, on April 6 last, the Bangladesh Association of Banks (BAB) sent a letter to the central bank raising objection to its move on appointment of two directors from among individual depositors in every bank.

On April 17 last, the central bank turned down the private commercial banks plea and asked them to submit fresh recommendations in this regard within two weeks.

On May 22 last, the central bank sought fresh proposals from the BAB to frame the modalities of selection of two directors from among depositors in each commercial bank.