Top bank officials must provide their business information to board of directors

A bank's directors, managing directors and their subordinates two notches downwards have to submit to the bank's board of directors all the information related to businesses owned by them and their families.

Data for each calendar year must be submitted by 20 January of the following year. However, last year's (2020) information can be submitted by 28 February this year.

The Bangladesh Bank's Banking Regulation and Policy Department issued a circular in this regard on Thursday (21 January).

The circular mentioned that according to the Bank Company Act, the banks' directors, managing directors and their subordinates are required to provide information about businesses owned by them and their families on an annual basis.

The central bank reminded the banks of their obligation to go by the law.

It has been reported in the media at various times that many directors and top officials of the banks have been taking loans in collusion with each other and sharing any work related to the bank among themselves.

According to an estimation of the central bank, the bank directors have borrowed more than Tk1,500 crore so far through cooperation among themselves.

The bank officials said the bank directors and managing directors have been reminded of the obligation to submit information about their businesses to the board in order to bring transparency in the banking business.

Kazi Akram Uddin Ahmed, former president of The Federation of Bangladesh Chambers of Commerce and Industries and chairman of Standard Bank, told The Business Standard that reminding the top bank officials of the law is a good initiative.

He said his organisation regularly receives such information, but other organisations may not have been receiving it. He does not give any top officials working in the bank any opportunity to do business with the bank and others should not allow that either, he added.

Syed Mahbubur Rahman, former president of the Association of Bankers and managing director of Mutual Trust Bank, told TBS that such information was part of banking compliance.

In response to a question, he said the central bank has issued a circular in this regard as many banks may not have been following the law.

The banks' compliance with regulation would have increased if the central bank had taken action against the directors and managing directors of the banks who were not providing information regularly, he opined.

The veteran banker said the circular was issued to prevent those involved in the banks from doing business with their own banks.