Parliamentary watchdog for allowing four family members as directors of a bank

The parliamentary standing committee on the finance ministry has finalised its recommendations on changing law to allow up to four members of a family in the board of directors of a bank.

The law currently allows maximum two members of a family as directors of a bank. 

The committee finalised its recommendations on the Banking Companies (Amendment) Bill, 2017 in a meeting on Tuesday.

Committee Chairman Muhammad Abdur Razzaque told bdnews24.com after the meeting that the Bill might be tabled in parliament for passage on Wednesday.

The Cabinet on May 8 cleared the draft of the bill, also allowing directors of commercial banks to serve three consecutive terms, or nine years.

A director of a bank can remain in the board for two consecutive terms or maximum six years.

Many related to the banking sector have been critical of the Cabinet move, saying the decisions would create opportunity for the families to reign in the banks, and for the influential people to retain directorship.

“We’ve recommended passing the Bill as it is,” Razzaque said.

The Bill was scheduled to be discussed in the committee’s meeting in October, but its members did not it as Finance Minister AMA Muhith was not present.

Muhith was not present in Tuesday’s meeting either.

After the meeting on Oct 29, Razzaque had said, “We want to know from the finance minister by what logic will the law be amended.”         

According to the minutes of the meeting, Razzaque said the issues of family members and tenures of directors should be reconsidered.

He had said the Cabinet must have cleared the bill considering different aspects, but given the current situation, it was needed to decide whether the bill could be sent back for reconsideration.

Committee member Farhad Hossain had also questioned the provision on the number of members from one family in a bank’s board.

Farhad and Begum Akhtar Jahan had said the Bill should be reconsidered.

But State Minister for Finance MA Mannan backed it in the meeting, saying the Cabinet had approved it after ‘serious consideration’.

Now it’s clear from Razzaque’s comment that the committee has made the recommendations following the Cabinet decision.

This will be the sixth amendment of the Act passed in 1991. It went through changes for the last time in 2013.