Tuesday, 16 July, 2024, Reg No- 06
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BB asks banks to form, activate NRCs

Published : Wednesday, 22 May, 2024 at 12:00 AM  Count : 74

Bangladesh Bank (BB) on Tuesday instructed  scheduled banks to form and activate   Nomination and Remuneration Committees (NRC) in line with the guidelines set in the Corporate Governance Code-2018.

In a circular, the central bank underlined the need for the NRCs to oversee and ensure the corporate governance in the banking sector.

The committee is tasked with formulating policies related to the nomination and remuneration of board members, top executives, and overall governance structure.

According to the directive, each bank must establish an NRC comprising members with the requisite qualifications and experience as stipulated in the Corporate Governance Code-2018.

The primary responsibilities of the NRC include evaluating the performance of board members and senior executives, ensuring the transparency of the nomination process and prepare appropriate remuneration packages in alignment with the banks long-term goals.

This move aims to enhance accountability and governance within banks, thereby strengthen financial systems stability.

The circular also underlined the need for banks to ratify their NRC guidelines at their respective boards and to ensure compliance with the corporate governance norms.

Banks are required to submit their NRC formation details and operational plans to Bangladesh Bank by June 30, 2024.

The central bank will closely monitor the implementation process to ensure adherence to the prescribed standards.

The new guidelines align with section 15 (9) of the Banking Companies Act, 1991, which empowers Bangladesh Bank to issue directives.

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