Dhaka Bureau: The Bank Company Act is being amended again by bringing several changes, including bans on going abroad for willful defaulters, car houses, and company registration. The definition of willful defaulters will also be defined, and provision will be made to exclude them from political party committees.
Amendments have been brought into the bill to further amend the Bank Companies Act of 1991. There is also a provision in the bill that no more than three bank directors can be from one family. Also, the concerned bank can take legal action against the person responsible for the financial compensation for the irregularities of the directors or executive officers of the bank.
Finance Minister AHM Mustafa Kamal presented the bill in Parliament on Thursday (June 9). Later, within seven days, the bill was sent to the Parliamentary Standing Committee on Finance for examination and report.
According to the bill, banks and financial institutions will form two committees as per the instructions of Bangladesh Bank to identify and finalize willful defaulting borrowers. Banks and financial institutions will send the list of willful defaulters to Bangladesh Bank from time to time. After the finalization of the list, the willful defaulter person or organization can appeal to Bangladesh Bank within 30 days, and Bangladesh Bank’s decision in this regard will be considered final.
In addition, there is an opportunity to impose restrictions on willful defaulters in several cases, including a ban on foreign travel and a ban on trade license issues.
According to the bill, the board of directors of a bank may have representative directors on behalf of a maximum of two organizations or companies under its interest or control outside of a single family member. However, not more than one representative director can be appointed on behalf of any institution or company to the board of any bank.
According to the draft law, a natural person cannot be appointed as a representative director on behalf of a shareholder on the board of a bank. That is, if a person owns the shares of the bank, no other person can be appointed as a director as his representative.
As per the existing law, no bank director can be a director of any other bank or financial institution at the same time. However, after the implementation of this law, there is an opportunity to become the director of the insurance company for a maximum of two terms. However, according to the Insurance Act enacted in 2010, the director of an insurance company cannot be the director of a bank company.
According to the amendment draft, if a person is a director of a bank, he cannot be a director of any other bank, financial institution, insurance company, or subsidiary company of these companies at the same time.
Although the existing law provides for the appointment of alternate directors, nothing is said about the tenure and qualifications of the alternate directors.
Although the new law provides for the appointment of alternate directors, the tenure and qualifications of the alternate directors are not specified. In the draft amendment, if a director stays abroad for at least three continuous months, the board can appoint an alternate director against the original director at most once a year due to his absence. The same conditions as for the appointment of directors shall also apply to the appointment of alternate directors.
Regarding the law, AHM Mustafa Kamal said that some amendments are being made to the law to establish a modern and timely banking system.
Incidentally, at the time of signing the loan agreement in February, the IMF stipulated that the draft law be tabled in parliament by September. The Cabinet, chaired by Prime Minister Sheikh Hasina, gave final approval to the draft on March 28.
