BRPD Circular Letter No. 21: Formation of Board of Directors and Sub-Committee of Bank-Company and their functions

Bangladesh Bank
Chief Controller's Office
Motijheel, Dhaka-1000
Bangladesh
Banking Regulation and Policy Department

29 Bangabda 1431
BRPD Circular Letter No.-21 Date: ------------------- 12 May 2024

Chairman, Board of Directors and
Chief Executive/Managing Director
All Scheduled Banks operating in Bangladesh

Dear Sir,

Regarding the formation of the Board of Directors and Sub-Committees of Bank-Companies and their functions.

Reference is drawn to your attention to BRPD Circular No.-2 dated 11 February 2024 on the subject cited above.

2. Through the aforementioned circular, necessary instructions were provided regarding the formation of the Board of Directors of Bank-Companies and the formation of Executive Committee, Audit Committee, and Risk Management Committee comprising board members, along with their responsibilities and other applicable matters. Since there is no provision for the formation of any other committee other than the aforementioned committees under the Bank-Company Act, 1991, instructions were provided through the said circular not to form any other permanent or temporary committee or sub-committee besides the three mentioned committees.

3. To ensure institutional governance, the Corporate Governance Implementation Committee (CGIC) issued by the Bangladesh Securities and Exchange Commission in the form of Circular No. BRCD-2018 (amended up to 2023) and subsequent circulars continue to be applicable to companies listed in the capital market. The said Circular No. BRCD-2018 mentions the formation of the Corporate Governance Implementation Committee (CGIC) and its functions. Now, since there is no opportunity to form any permanent or temporary committee or sub-committee other than the three committees mentioned under the Bank-Company Act, 1991, the CGIC-related program (mentioned in Circular No. BRCD-2018) has been entrusted to the Audit Committee formed by the Board of Directors of the Bank-Company. In this regard, decisions taken by the Audit Committee must be approved by the subsequent Board meeting. However, matters concerning the appointment/employment, responsibilities, honorarium, salary-benefits where applicable, incentive bonuses, and other facilities of Directors of Bank-Companies, Independent Directors, Managing Director or Chief Executive Officer, and officers below these two levels will be conducted in accordance with BRPD Circular No.-02 dated: 11 February 2024, BRPD Circular No.-03 dated: 14 February 2024, BRPD Circular No.-05 dated: 27 February 2024, and subsequent circulars/circular letters issued on this matter.

4. These instructions are issued under the powers granted by Section 45 of the Bank-Company Act, 1991.

Yours faithfully,

(Md. Harun-ur-Rashid)
Director (BRPD)
Phone: 9530095