Parliament passes law allowing four family members on bank board

The government has pushed through parliament the amendment of a law allowing four members of a family to sit on the board of banks as directors amid a walkout by the opposition and widespread criticism outside.

The MPs passed the ‘Bank Company (Amendment) Bill 2018’ into a law in voice vote when Finance Minister AMA Muhith tabled it on Tuesday.

The Jatiya Party legislators walked out of parliament earlier, alleging the amendment will destroy Bangladesh’s banking sector.

Many allege the law will create opportunity for the families to reign in the banks.

It was clear in the comments made by the finance minister at the Secretariat earlier in the day.

“There are always objections to laws whenever we make some,” he told reporters.

About the allegation of giving the families’ the opportunity to virtually run the banks, he said, “Now an entire family controls a bank. But I think we’ve made it more specific.”        

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

A bank director could remain in the board for two consecutive terms or maximum six years in line with the law before the changes.

Many related to the banking sector have been critical of the Cabinet move, saying the decisions will create opportunity also for the influential people to retain directorship.

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

When the parliamentary standing committee on the finance ministry scrutinised the Bill in October last year, its chairman Muhammad Abdur Razzaque had said, “We want to know from the finance minister by what logic will the law be amended.”

He, however, changed his tone later and said they were recommending passage of the Bill as it was.

Tabling the Bill on Tuesday, Muhith said it was necessary to pass it in order to remove opacity in three provisions relating to directors in the existing law.

“There are concerns that these ambiguities may hinder the attempts of the banks to speed up their operations.

“If someone from a family does business separately and pay taxes on his or her own, he or she cannot be called dependent on the family,” he argued.

Rustum Ali Faraji, an independent MP, placed a motion to send the Bill to the parliamentary standing committee on public accounts before passage “The Bill has surprised us. The law was amended five times in personal interest, not public interest.”

“The directors take loans themselves by using the names of their relatives instead of developing the banking sector. Subsequentlym they become loan defaulters. The money cannot be recovered. We can’t amend the law for some looters. They loot the money and send it abroad,” he added.

The Jatiya Party’s Fakhrul Imam, referring to the finance minister, said, “You speak out of patriotism, the spirit of independence whenever you utter the word ‘rubbish’. When you say a huge amount of money is being stolen from the banks, you also say it from the spirit of Liberation War.

“There is nothing to make you realise. You are the nation’s pride. Our experiences cannot be compared with yours,” he said.

The MP then demanded withdrawal of the Bill, saying, “No-one can claim a bank as his or her own. If you make a law to safeguard the interests of the sponsor directors, the remaining 90 percent will be deprived. The nation will benefit if you withdraw the Bill.”

Opposition Whip Nurul Islam Omar said a person uses his or her influence if he or she remains on a post for a long time.

Nurul Islam Milon MP said, “The banking sector is on the edge of collapse. People are afraid of keeping money in the banks now. The year 2017 was disastrous for the sector. No control of the Bangladesh Bank is visible.

“Now this Bill has been brought to destroy the banking sector from the roots. The finance minister is an experienced and learned person. He should withdraw it,” he said.

Rowshan Ara Mannan said the government was bowing down to pressure by the bank owners by amending the law.

The finance minister then placed his arguments and urged the opposition lawmakers to withdraw their motion.

Opposition Chief Whip Tajul Islam Choudhury stood up and sought the speaker’s permission to speak.

Deputy Speaker Fazle Rabbi Miah, however, denied him permission to speak, saying no MP can stand up like Tajul amid a discussion on a Bill.

He advised Tajul to raise his points during the discussion on their motion.

Tajul, however, left the House with the other opposition MPs at the time.

They returned after the passage of the amended law.