Bangladesh Bank (BB) has made it mandatory for banks to appoint independent directors at age between 45 and 75 years. The central bank issued a circular in this regard on Wednesday
According to the circular, independent directors can serve for three years and can be reappointed in accordance with Section 15 of the Bank Company Act, 1991.
However, Bangladesh Banks permission will be required for appointment, reappointment or removal of independent directors.
If a banks board wishes to remove an independent director, they must request BB, stating specific reasons. BBs, in turn, can remove any independent director by providing specific reasons.
Independent directors must have graduation or post-graduation in economics, banking, finance, accounting, business administration, law or cost accounting. For digital banks, priority will be given to independent directors with higher education in information technology.
Family members of appointed independent directors can hold shares in the bank or hold any profitable position within the bank, it said. Banks are required to pay Tk 50,000 per month to each independent director, along with a fee of Tk 10,000 for attending each meeting.
Independent directors must inform Bangladesh Bank of any violation of provisions in the Bank Company Act-1991 or that of any other rules by the board of directors.
If opinions of independent directors are not taken seriously or contradictions are found in the banks operations, they must inform BBs Department of Off-Site Supervision and Banking Regulation and Policy Department in writing.
The notification specifies that the maximum number of directors for a bank is 20, with three of them being independent directors. However, if there are fewer than 20 directors, there can be no more than two independent directors.
Individuals convicted of any offence, fraudulent activity, financial misconduct or involvement in other illegal activities will be ineligible for appointment as directors or independent directors.
On February 11, BB issued a circular restricting the minimum age for directors at 30, whereas previously there was no such limit.
Directors must have at least 10 years of experience in bank management, business or a related professional field. Work experience before the age of 18 not being considered.
