Banks asked to reduce number of directors from same family to 3

The Bangladesh Bank has asked commercial banks to reduce the number of directors from the same family to three.

According to the Bank Company Act 1991, a maximum of four persons from a single family could be appointed as directors of a bank. But, the Bank Company (Amendment) Act 2023 has reduced the number to three.

A circular issued by the central bank yesterday said if it becomes necessary that a bank director must resign to comply with the law, the directors will determine through mutual agreement who would resign. In case of failure to reach a mutual agreement, it shall be determined by holding a lottery in a meeting of the board of directors, said the circular.

Through the circular, the central bank has asked commercial banks to inform its Banking Regulation and Policy Department after reducing the number of directors from the same family to three.

A managing director of a private bank told TBS that at least three banks have more than three directors from the same family. These banks have been asked to reduce the number of directors from a single family to three at the earliest. 

The banker said the central bank should have fixed a specific time in this case.