NBFI chairmen can’t hold posts in subsidiary firms

Chairmen of non-bank financial institutions cannot be the chairman or a director or a member of any company or institution or foundation formed by the same financial institutions.

At the same time, any person appointed as the chairman of the executive committee, the audit committee, or the risk management committee consisting of the members of the board of the financial institution will not have the same opportunity.

In a circular issued on Thursday to all managing directors and chief executive officers of financial institutions, the Bangladesh Bank said such instructions have been given to ensure more discipline and good governance in the management and administration of financial institutions.

The circular said if the said person of a financial institution is employed in the said position in any of the subsidiaries, the post should be vacated by 30 June. At the same time, after the vacancy, the central bank should be informed within seven working days.

At the same time, the circular further instructed that if any person serves as a shareholder director or nominated director or independent director of a financial institution for a period of one year, he will never be appointed in that financial institution on a regular or contract basis after the maturity or retirement.

However, if there is anyone such appointment, the post will have to be vacated by 31 July. At the same time, the central bank has to be informed within the next seven working days.

Earlier on Wednesday, the same instructions were given regarding scheduled banks.