The cabinet on Monday approved the draft ‘Bank Company (Amendment) Bill, 2017’ which will allow four members of a family to be the directors of a bank.
The existing law permits only two members of a family to be the directors of a bank.
The cabinet gave the approval at its weekly meeting held at the Secretariat with prime minister Sheikh Hasina in the chair.
While briefing reporters after the meeting, cabinet secretary Mohammad Shafiul Alam said it was the desire of the founding directors of private banks that four members of a family be allowed to be directors of a bank instead of two. “The Bangladesh Bank has also given a positive note in this regard,” he said.
As per the amended law, he said, one director will be able to remain in his post for nine consecutive years. “After giving a three-year break, he will be eligible to be director again for another nine years,” he said.
Currently, one is allowed to remain director of a bank for six years and after a three-year break he or she can be director for another six years.
The draft law also restricts commercial banks from selecting, nominating, appointing and posting anyone to the posts of director, managing director and chief executive officer without any prior approval of the central bank.
“If the Bangladesh Bank rejects the selection, nomination, appointment and posting that will stand cancelled,” the cabinet secretary said.