The New Nation - Internet Edition

Staff Reporter

Some top-level officials of different private banks are allegedly abusing rules to continue with the job over their retirement ages.

"He has forgotten his birthday," has become a witty saying among the bank officials pointing at some aged chief executives of private banks in Dhaka, who are not going on retirement despite end of their terms.

Rather, the top officials are moving from one bank to another securing better offers, for they are champions in serving personal interests of the boards of directors of various banks, it is alleged.

The Chief Executives or Managing Directors of some of the banks are allegedly harmful to the banks as well as to the interests of depositors and other stakeholders.

These officials, at the cost of the institutions that they head, move from one bank to another by pursuing a "three-fold" technique to be a successful careerist.

After joining a private bank as deputy managing director or managing director in the first phase, they recklessly allow sanctions of loans to the bank directors or their cohorts. They also help rescheduling these loans.

Before the damages to the bank comes to light the managing director inter into the second fold and join another bank and start to do the same thing and ultimately inter into the third fold of their jobs. As many as 17 chief executive officers of private commercial banks and non-banking financial institutions were identified to have pursued the "three-fold" policy.

The Boards of Directors of different banks are fond of appointing these sorts of bankers because they know how to use the loopholes in the banking system efficiently and how to deprive the depositors and shareholders of what they rightfully deserve.

After retiring from the post of managing directors some of these bankers rejoin the same bank as advisers.

The Banks where such practices are on include: Uttara Bank, Eastern Bank, Dutch-Bangla Bank, Mercantile Bank, Shahjalal Islami Bank, Premier Bank, Bank Asia, Jamuna Bank and Trust Bank.

Allegations of rampant corruption were not found against the top officials of those banks. But their weak and lenient administration allegedly harmed the banks that they served earlier.

However, the situation has improved slightly after passing of the Bank Companies Act of 1991.

Rules on private banks say, "On the matter of retirement and re-employment, the employees shall be governed by the Provisions of the Public Servants (Retirement) Act 1974.

Public servants go on retirement at the age of 57. But the Chief Executives of the banks are not used to follow this rule. They are used to retire after 65, though some of them are allegedly continuing jobs beyond this limit.

However, Bangladesh Bank has issued a circular on Rules and Regulations for appointment of Chief Executive and Adviser in Banks, which gives additional facility to the bankers in respect of retirement.

It says, "No person crossing the age of 65 years shall hold the post of Chief Executive of a bank."

According to Bank Companies Act of 1991, the banks need to obtain prior approval of Bangladesh Bank in respect of appointment, dismissal, release or removal of Chief Executive and Adviser.

But the central bank still approves the appointments according to desire of boards of private banks.

The rule has made the appointment of Chief Executives renewable after a completion of a compulsory three years tenure.