Bill allowing 4 family-members on bank boards passed

Bill allowing 4 family-members on bank boards passed

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The much-talked-about ‘Bank-Company (Amendment) Bill 2018’ was passed in Parliament on Tuesday with a provision to allow upto four members of a family to become directors of any bank and the directors to hold their posts for nine years consecutively.

Opposition Jatiya Party staged a walkout in the House opposing the passage of the bill, which they said, was made to protect the interests of some individuals, not the mass people.

Finance Minister AMA Muhith moved the bill in the House, seeking amendment to the Bank Companies Act 1991. It was passed by voice vote.

According to the existing Bank-Company Act 1991, two members of a family can be directors of a bank, while the tenure of a bank director is three years and the director can be disqualified for re-election on completion of two consecutive terms (six years) unless s/he elapsed three years.

But the proposed law states that a director can be disqualified for re-election on completion of nine consecutive years unless s/he elapsed three years.

Arguing for allowing four members instead of existing two from a family to become directors of a bank, the objective of the bill states that if any member of a family conducts separate business and pays tax, the person can’t be called a dependent on the family.

But such members of a combined family can’t be the director due to the existing provision if two of them already are. So an amendment to the provision was proposed, it added.

Earlier on May 8 last year, the Cabinet cleared the draft of the bill.

In 2013, the government amended the act restricting the number of directors from a family on the board to maximum of two to check irregularities and indiscipline, said officials.

In October 2016, Bangladesh Association of Banks, an organisation of the private bank owners, at a meeting with the finance minister demanded an amendment to the act.

Talking on the bill, Rustam Ali Farazi said the amendment to the bill astonished him as this was brought just to protect the interest of some individuals. “There’s nothing here for the interest of the mass people,” he said.

He mentioned that the amendment was brought only to give the bank ownership to the founding directors forever.

“Good governance has to be established in banks and the bank management has to be streamlined,” he said.

Rustam Ali Farazi said the amendment will invite a great disaster and this is an ominous sign for the banking sector. “We can’t enact any law to protect the interest of the individuals,” he said.

Nurul Islam Milon said the country’s banking system has been on the verge of ruination. “The government has no control over the banking system,” he said.

He claimed that the amendment was brought to the act to completely destroy the banking system.

Rawshan Ara Mannan said all banks will turn into family banks following the amendment.

Fakhrul Imam, Nurul Islam Omar and Nur E Hasna Lily Chowdhury also opposed the amendment.

As Opposition Chief Whip Tajul Islam Chowdhury later stood for saying something over the issue, Deputy Speaker Fazle Rabbi Mia, who was in the chair, told him that in the middle of the passage of the bill, he could not speak.

Jatiya Party MP Kazi Firoz Rashid also wanted to speak on the bill only to be denied.

At this stage, the MPs from opposition Jatiya Party staged a walkout.

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