Bank company bill passed

Banks to have 4 of a family as directors

Banks to have 4 of a family as directors

Dhaka, Jan 16 (Just News): A bill seeking amendments to Bank Company Act 1991 was passed in parliament on Tuesday amid walkout by Jatiya Party and independent lawmakers.

Jatiya Party lawmakers and lone independent lawmaker Rustam Ali Faraji raised objection to the controversial bill before staging the walk-out in protest at not allowing them to speak on the bill soon after a speech by finance minister AMA Muhith on it.

The controversial bill, pursued by Bangladesh Association of Banks, an organisation of the private bank owners since 2016, would enable four members of a family to be directors of a bank — up from the previous two.

The passage of the bill will also enable the directors to hold the post of directors for three consecutive terms or nine years — an increase from two-terms or six years.

Earlier, lawmakers Fakhrul Imam of Jatiya Party and Rustam Ali Faraji said the bill would serve the interest of individuals and families but not the people’s interest.

They demanded repeal of the bill and called for placing it for public opinion and further scrutiny.
Opposition lawmakers Fakhrul Imam, Md Nurul Islam Omar, Nurul Islam Milon, Rawshan Ara Mannan and Noor-e-Hasna Lili Chowdhury and Rustam Ali Faraji spoke against the bill.

Banking experts who have been opposing the bill since it was cleared by the cabinet in last May warn that it will widen family control on private commercial banks amid hostile takeover of a number of banks by S Alam, a Chittagong-based trading house, in the just concluded calendar year.

A financial institution division official said the passage of the bill would allow directors in private bank to enjoy extension of directorship for nine years even though many of them were towards the end of their six-year tenure.

For those directors the directorship, in fact, would be now 14 years in a row, he noted.
Muhith, while responding queries of reporters on the bill at secretariat, said there were always objections to the amendment of the bill.

Asked whether the family domination in banks would strengthen following passage of the bill, Muhith replied in the negative.
On November 21, the parliamentary standing committee on ministry of finance recommended passage of the bill without any major recommendations that surprised banking experts.

Former Bangladesh Bank governor Salehuddin Ahmed said that increasing family members in the board of directors would shrink opportunity for professionals to be bank directors.

Former central bank deputy governor Ibrahim Khaled said that allowing more than two family members in the board of directors would create scope for turning the banking activities to a family business.

On September 12, the bill was placed in parliament amid strong opposition from Jatiya Party which termed the government move unethical.

The act was earlier amended in 2013.