Regulatory Alerts2023-07-26
Added
BRPD Circular No. 14: Implementation of Article 15 (10) of Bank-Company (Amendment) Act, 2023
The circular implements the amendment to Article 15(10) of the Bank-Company Act, 1991, which reduces the maximum number of directors from the same family serving on a bank's board from four to three. If a bank exceeds this limit, directors must resign through mutual agreement; if no agreement is reached, the departing director is determined by lottery at a board meeting. Scheduled banks are directed to reduce their family director count to three and notify the Banking Regulation and Policy Division, Division-2, at the earliest opportunity.
Bangladesh Bank Chief Executive Motijheel, Dhaka-1000 Bangladesh Ref No.: BRPD.CIR.01.00.000.00.00.000.23.112 Banking Regulation and Policy Department 11 Shrawan 1430 BRPD Circular No. 14 Date: ------------------- 26 July 2023
To, Chief Executive / Managing Directors All Scheduled Banks operating in Bangladesh
Dear Sir,
Regarding the implementation of Section 15(10) of the Bank-Company (Amendment) Act, 2023.
Reference is invited to the Bank-Company (Amendment) Act, 2023 (Act No. 13 of 2023), published in the Extra Gazette of Bangladesh on 26 June 2023 and effective from that date.
- Section 15(10) of the Bank-Company Act, 1991 (Amended 2018) previously stated that no more than four members of a single family could hold the position of director in a bank-company at the same time. Section 15(10) of the Bank-Company (Amendment) Act, 2023 has been amended as follows:
"Notwithstanding anything contained in any other law for the time being in force or in the constitution/memorandum or articles of association of any bank-company, no more than 3 (three) members of a single family shall hold the position of director in a bank-company at the same time."
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In this regard, if it becomes necessary for any director of a bank-company to resign to fulfill the purpose of Section 15(10) of the Bank-Company (Amendment) Act, 2023, it shall be determined through mutual agreement among the directors which director shall resign from the said position. In the event that no agreement is reached, it shall be determined by conducting a lottery ceremony at a board meeting.
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Instructions are hereby given to reduce the number of directors from the same family to three at the earliest and to inform the Banking Regulation and Policy Department, Division-2.
Yours faithfully,
(Md. Harun-Or-Rashid) Director (BRPD) Phone: 9530095