New law to allow bank directors to serve three consecutive terms

The government has given its initial clearance to amend the law allowing directors of commercial banks to serve for three consecutive terms.

On Monday, the regular Cabinet meeting chaired by Prime Minister Sheikh Hasina approved in principle the Banking Companies (Amendment) Act 2017.

A director can currently remain on board for six years -- two consecutive three-year terms, Cabinet Secretary Mohammad Shafiul Alam told the media. However, after a break for three years, an individual can be once again made a director.
 

"The amended law will allow them to serve for three consecutive terms, which means nine years. They can be reappointed after a three-year break,” he said.

The existing law does not allow more than two members of the same family to sit on the board, but the amended law would increase the number to four, said the cabinet secretary.

The clause relating to directors' tenure of the Banking Companies Act, which was formulated in 1991, has been amended five times so far -- the last in 2013.