Retired top bank officials will not be allowed to be appointed as advisors or consultants of their banks without completing their five years of retirement, according to a new direction issued by the Bangladesh Bank (BB).
The central bank came up with the announcement aiming to ensure proper management, professional standard and neutralism in the banking sector of the country.
The Banking Regulation and Policy Department (BRPD) of Bangladesh Bank on Wednesday issued a circular in this regard to serve the purpose of the Bank Company Act.
Former bank director, managing director, chief executive officer or additional managing director and deputy-managing director ranked officials can't be appointed as advisors or consultants of their banks without finishing five years of retirement.
Earlier, the time limit for such appointments was one year, according to the bank policy of Contractual Advisor and Consultant Appointment of October 27, 2013.
At the same time, regular or contractual bank officials can not be appointed as directors of the same bank after the conclusion of their tenure, the circular stated.
Siting the Bank Company Act section 15(9), it said any official connected with the bank's interest will not get appointments as individual directors.
Besides, former directors, managing directors or other officials also can not get appointments as individual directors of the bank's managing bodies.
A recent retired managing director of a bank unwilling to be named, told TBS that "I can not provide any service to my bank after waiting for five years. I would forget many things regarding the bank which will hinder its progress."
The reason behind such direction of Bangladesh Bank is yet to be cleared, he said adding that "Why the matter of connection with the bank's interest will be raised if retired bank officials do not have any shares?"
The inspirations of honest bank officials will be ruined who want to enhance the banking sector after their retirement due to this direction, he insisted.
Central Bank spokesperson and Executive Director Sirajul Islam told TBS that "A bank develops dependency on a managing director after he performs his duties for a longer period. This dependency grows further with their new appointments as advisers or consultants. Bangladesh Bank wishes to reduce such dependency."
Regarding the new circular, former president of Association of Bankers Bangladesh and Managing Director of Mutual Trust Bank, Syed Mahbubur Rahman, said five years is a long time which should be compatible.
Meanwhile, the bank officials can escape the time barrier by getting appointed in other banks.