BAB puts pressure for scrapping limit on bank directors’ tenure

Staff Correspondent | Published: 22:41, Oct 30,2016

 
 

Owners of private banks have put pressure on the government for amendment to the Bank Company Act 2013 within three years after it came into force in August 2013, officials said.
They said Bangladesh Association of Banks on Sunday placed eight-point demands including cancellation of the mandatory provision of seeking Bangladesh Bank approval for appointment of director during a meeting with finance minister AMA Muhith at the secretariat. 
Led by BAB chairman Nazrul Islam Mazumder, the association also demanded that sponsor directors should be allowed to remain as directors for more than two terms or six years.
The BAB raised objection to the family definition for inclusion of directors from sponsor family under the Bank Company Act 2013.
BAB’s other demands include exemption of tax on provision of unclassified investment, waiver of tax in case of transfer of banks shares to legal heirs and considering Zakat and Corporate Social Responsibility expenses as allowable deduction in the income tax.
The private bank owners also demanded that they should be exempted from the responsibility of contributing to the workers’ welfare fund. They said this would create huge financial burden on the bank operators.
Muhith told reporters after the meeting that most of the demands raised by BAB were linked to the Bank Company Act 2013.
He said it was necessary for him to consult with the prime minister before taking any decision in this regard.
He said BAB raised serious objection to the provision that curtailed the right of share holders to the level of managing directors and tenure of sponsor directors for two terms or six years.
BAB did not specify years for the tenure of sponsor directors in it demands.
BAB chairman Nazrul Islam Mazumder said not specifying timeframe for the tenure of sponsor directors did not mean that sponsor directors would remain as director for whole life.
He said it was up to the government to fix the years for sponsors directors.
Officials attending the meeting said tenure of the sponsor directors could be 10 to 15 years.
On July 14, 2013 the parliament passed the Bank Company (Amendment) Bill - 2013 aiming at ‘streamlining’ appointment of directors in banks.
The bill obligates the owners of bank companies to appoint three independent directors in the bank management boards to ensure transparency. It also prohibits directors of banks or bank companies from simultaneously holding similar posts in multiple financial institutions. 

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