Traditional commercial banks will have to close their Islamic
banking wings, and only the full-fledged Islamic banks will be allowed to
offer the shariah-based services.
If commercial banks offer Islamic
banking along with traditional services, the main spirit of the Islamic
banking is hampered, a finance ministry official said.
The change has been incorporated in the amendment to the
Banking Companies Act, which is likely to be placed in a cabinet meeting today
for approval.
The law will also have stringent measures to curb frauds in
fund collection from people in the name of deposits, and scams in the banking
sector.
If any non-bank organization collects deposits from the
public, it will have to take approval from the central bank, according to the
proposed amendment.
Bangladesh
Bank will also monitor the activities of these organizations and take
punitive measures against them if any irregularity is detected.
The ministry official said the changes will be included in
the amendment as different organizations, including Destiny, collected deposits
from their members and later embezzled the funds.
No bank will be allowed to appoint more than 15 directors,
but the new banks will get two years to bring down the number of their
directors.
Over the last decade, successive governments took a number
of initiatives to limit the number of directors on the board to ensure sound
corporate governance and discipline. But the moves fell flat due to pressures
from influential bank owners.
The existing law does not specify the number of directors.
During the time of the last BNP government, the central bank
set the maximum number of directors at 13 but could not implement the directive
as the provision was not included in the Banking Companies Act.
The proposed amendment also empowers the BB to remove any
chief executive officer of the
state banks.
Under the existing Act, the power of removing the chairmen,
directors and other high officials, including the managing directors of
state-run and specialised banks, remains in the hand of the government.
The existing Act says the BB can remove the chairman, any
director or official of all commercial banks on charges of irregularities,
except for the government-nominated chairman, director or chief executive.
In case of irregularities by any government-nominated
official, the BB can only submit a report to the government for its
consideration.
Besides, the
banks' exposure to the capital market is being lowered to 25 percent of
their regulatory capital. The existing law allows banks to invest 10 percent of
their deposit in the stock market.
News source:
The Daily Star Bangladesh
Dated:- 4-Mar-2013
No comments:
Post a Comment