The central bank has taken a move to ensure good governance
in the country's banking sector through updating responsibilities and formation
of banks' boards of directors, officials said.
The Bangladesh
Bank (BB) issued three circulars in this connection Sunday and asked
chairmen and chief executive officers (CEOs) of all the banks to comply with
the existing rules and regulations in line with the Bank Company Act (Amended)
2013.
Under the latest moves, the banks have been asked to form
risk management committees along with the existing executive and audit ones to
minimise fraud and forgeries in the banking sector.
The BB has specified the terms of reference and
responsibilities of the committees to ensure accountability and transparency of
the banks' management.
"We've taken the measures to protect the interest of
depositors through establishing good governance in the banking sector," SK
Sur Chowdhury, deputy governor of the BB, told the FE.
He also said the central bank has issued the circulars in
line with the Bank Company Act (Amended) 2013 to ensure corporate governance in
the bank management.
The central bank said prior approval will be sought from the
BB for appointment of new directors of the banks excepting the specialised
ones.
Currently, there are more than 600 directors in the
commercial banks.
A meeting of the Board of Directors can be held once in a
month, but it can be more if necessary. However, at least one board meeting has
to be held in three months, according to the circulars.
Regarding responsibilities of the chairmen of the boards of
directors, the BB said the chairman of the board or chairman of any committee
formed by the board or any director does not personally possess the
jurisdiction to apply policymaking or executive authority. Therefore, he will
not participate in or interfere into the administrative or operational and
routine affairs of a bank.
The CEO will ensure compliance of the Bank Company Act, 1991
and/or other relevant laws and regulations in discharge of routine functions of
the bank.
"The CEO shall report to the Bangladesh
Bank of issues violative of the Bank Company Act, 1991 or of other
laws/regulations and, if required, may apprise the board post facto," the
BB said.
Besides, the BB issued a unified policy for the banks in
appointing their advisors and consultants contractually.
Under the new rules, former director, chief executive
officer or any other officer of the banks cannot be appointed as the advisor or
consultant of the same banks contractually immediately after their retirement
or termination.
However, they can be appointed as advisor or consultant of
the same bank after passing one year from the date of their retirement or
termination.
News Source:
Financial Express
Dated:- 28-Oct-2013
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