Bank MD will report BB about board irregularities

Staff Correspondent : If the board of the bank commits any irregularity or takes any decision harmful to the depositors, it should be reported to Bangladesh Bank.The chief executive or managing director (MD) of the concerned bank will report this matter to the central bank.He shall inform the Bangladesh Bank of the irregularity of the Board in writing, verbally or otherwise.
If there is any illegal decision in the board meeting or any other meeting, the MD will remind the matter in the meeting.If the Board does not take it into account, it should inform the Central Bank.If any MD does not report such activities to the central bank, the central bank will take action against him.
These provisions have been mentioned in the policy regarding the appointment of chief executives or managing directors in commercial banks issued by Bangladesh Bank on Tuesday.It has been issued in the form of a circular and sent to the Chairman of the Board of Directors and Chief Executives of the Bank.This will be effective immediately, the circular said.
As a result, this policy will be effective in the case of those banks where MDs will be appointed or the period of appointment of MDs will be extended.By issuing the new policy, the central bank has withdrawn all the circulars issued earlier in this regard.
As the powers of bank MDs have been increased through the new policy, their scope of work and accountability has also been increased.The central bank hopes that if these rules are followed, good governance will be established in the banking sector.
At the same time, the central bank will strictly monitor the implementation of the policy. This policy was issued in the light of the roadmap announced by the Central Bank recently regarding establishing good governance in banks and reducing defaulted loans.
It has earlier issued a policy on appointing directors, ensuring their duties, responsibilities and accountabilities. According to the policy, no banker below 45 years can become MD.He can hold the post for a maximum of 65 years.The post of MD will be appointed for a maximum period of three years.
However, MD can be re-appointed subject to job satisfaction.MD should set targets for collection of defaulted loans, foreclosed loans.The rate of realization of these will be taken into consideration for his re-employment.At the same time, as a result of his management, the financial condition of the bank and overall rating management success will be taken into consideration.Deterioration in quality in these sectors will not be considered for reappointment.Location of MD abroad should be avoided as much as possible.If he wants to go abroad for urgent needs, he must take the approval of the central bank 10 days in advance.
At the same time information about the source of travel expenses should also be given. If the directors of the bank take or want to take any decision against the existing rules in the board or any other meeting, the MD will explain the rules.Also, if the Board takes any decision against the interest of the depositors, the MD will inform the Central Bank.If he does not report such incidents to the central bank, action will be taken against him.
Previously, there was no institutional opportunity for MDs to intervene against negative activities in board meetings.Now given. It further states that the MD of a bank cannot be removed before the expiry of his tenure unless he commits gross misconduct or deviance.To remove Bangladesh Bank approval.
If the MD wants to resign, he has to apply to the central bank with the recommendation of the board.The resignation will take effect only after the Central Bank approves it.However, Bangladesh Bank can remove the MD of any bank at any time in the interest of depositors citing specific reasons. In case of appointment of MD, a committee headed by the Deputy Governor of the Central Bank will interview the candidates.In this case, what kind of steps he will take in the interests of the depositors of the bank, what will be his role in the overall development of the bank – these things will be taken into consideration.
According to the policy, a person cannot become an MD if he is a defaulter or a tax defaulter.He will not be appointed to the post if he has been convicted by any court or if there is a negative observation against the person concerned by the judgment of the court.
Even if there are any negative comments against the person in the Central Bank investigation, he will be disqualified for the post of MD.An executive of an organization who has been removed from office or is bankrupt or deregistered cannot become MD.