Maximum three from a family allowed in bank boards

The cabinet has approved the draft bank company (amendment) bill-2023, limiting the number of directors from a family to three.

Currently, a maximum of four family members are allowed in the banks’ board of directors.

After final approval of the bill, there will not be more than three members from a family in the boards. Besides, the board members will need to put up collateral to avail loans.

Some more tough provisions have been included in the draft bill in an effort to contain irregularities in the banking sector.

The approval came at a cabinet meeting on Tuesday, with prime minister Sheikh Hasina in chair, said Mahmudul Hossain Khan, secretary to the cabinet division (coordination and reforms).

In a press briefing at the secretariat, the secretary said there are 34 provisions in the draft bill. All, irrespective of board members or their relatives, must submit collateral for availing of loans.

The bill defined willful defaulters and borrowers. If an individual does not repay the loan despite having the ability, resorts to fraudulence or fake information, and uses the amount for undeclared purposes, s/he will be defined as habitual defaulter.

The secretary said the concerned bank will submit the list of willful defaulters to the central bank and the latter will make arrangements to ban the concerned individuals from going abroad, ban his/her trade license and company registration.

If a habitual defaulter fails to repay loans within two months of receiving a notice, a process will be initiated to reclaim the money through the court. Also, if a bank does not submit the list of willful defaulters, the Bangladesh Bank may slap the bank with a fine ranging from Tk 5 to 10 million.