Bangladesh Bank asks financial institutions not to remove CEOs without its permission

The central bank has issued a circular requiring the financial institutions to take its permission for recruitment or removal of their chief executive officers.

Bangladesh Bank sent the circular, issued on Wednesday by its Department of Financial Institutions and Markets, to chairmen of all financial institutions.

The circular says it has been issued to consolidate the institutions’ financial strengths and protect deposits, further confidence óf depositors in the institutions, ensure good governance and protect public interest.

The central bank had earlier issued a similar circular for the banks.

Allegations are there that directors of different financial institutions embezzled money by disbursement of loans to dubious names as there was no accountability in removal of their CEOs.

The CEOs of the financial institutions demanded a policy for their protection at a meeting with Bangladesh Bank on Mar 3.

The new circular provides for serving one-month notice before resignation or removal of CEOs.

It says if a CEO wants to quit, they have to give the board of directors a notice assigning reasons to the resignation, and send a copy of the notice to the central bank.

The board has to serve a similar notice on its CEO if it wants to remove them and a copy has to be sent to Bangladesh Bank.