Summary: 

The Bangladesh Bank has mandated that independent directors in banks must be aged between 45 and 75 and cannot have family members holding shares in the bank. Any complaints proven against them will result in actions taken by the Bangladesh Bank under the Bank Company Act. Additionally, independent directors must possess at least 10 years of management or professional experience and hold a master’s or post-master’s degree in specified fields from a recognized university. These regulations aim to ensure good governance within the banking sector.

Content:

The Bangladesh Bank has implemented strict regulations to ensure good governance regarding the appointment and conduct of independent directors in banks. These regulations stipulate that independent directors must be aged between 45 and 75 and cannot have any family members holding shares in the bank, Furthermore, Bangladesh Bank would follow the Bank Company Act and take appropriate action if any allegations are verified against an independent director. Independent directors must have a master’s or post-master’s degree in economics, banking, finance, business administration, law, or accounting from a permitted university in addition to at least ten years of managerial or professional experience. Additionally, until specific requirements are fulfilled, anyone who has been identified as a willful defaulters, declared bankrupt by a court, or is in tax default is not allowed to serve as an independent director. According to corporate law, independent directors are only permitted to serve a maximum of three years and are not permitted to hold any lucrative positions within the relevant bank. However, their terms may be renewed. The Bangladesh Bank reserves the authority to appoint independent directors if deemed necessary, while the board of directors may request their removal based on specific reasons; however, banks themselves cannot unilaterally remove independent directors. Independent directors have the right to resign from their positions with a seven-day notice. The Bangladesh Bank will take appropriate action if complaints against an independent director are substantiated, and it retains the authority to remove any independent director based on specific reasons as outlined in the circular.

Picture and Article Source: The Business Standard