DFIM Circular Letter No. 40: Appointment of Independent Directors of a Finance-Company and their Duties, Responsibilities and Honorarium

Bangladesh Bank (Central Bank of Bangladesh) Head Office Motijheel, Dhaka-1000 Bangladesh. Ref No: DFIM.Cir.40 DFIM Circular Letter No.-40

To: Chairman, Board of Directors and Managing Director/Chief Executive Officer All Finance Companies operating in Bangladesh.

Dear Sir,

Regarding the appointment of "Independent Directors" in Finance Companies and their duties, responsibilities, and honorarium.

Reference is invited to DFIM Circular No. 02, dated March 13, 2024, on the subject cited above.

2. Through DFIM Circular No. 02/2024, guidelines were provided to Finance Companies regarding the policy to be followed for the appointment of Independent Directors and the determination of their duties, responsibilities, and powers. Now, paragraphs 4(g) and 4(h) of the said Circular concerning the experience and suitability for the appointment of 'Independent Directors' in Finance Companies are hereby replaced as follows:

"04(g) He/She must hold a Bachelor's or Master's degree accredited by a recognized university in Banking, Finance, Business Administration, Law, or Accounting. However, in the case of appointment as an Independent Director, a person holding a Master's degree with experience in executive positions at a well-known corporate institution, or a former Managing Director/Chief Executive Officer of a Bank Company or Finance Company, or a Chartered Accountant or Cost and Management Accountant engaged in the accounting profession, may be considered.

(h) Priority shall be given to experienced teachers in the Faculty of Business Studies or Business Administration, Law, and Information Technology at government, non-government, or autonomous universities; persons engaged in the legal profession; experienced bankers; and experienced officers of the Audit and Inspection Department of the Ministry of Finance, the Audit Department, the Ministry of Industries, and the Ministry of Law. Education in Information Technology shall be considered as an additional qualification."

3. Except for the aforementioned guidelines, all other guidelines contained in DFIM Circular No. 02, dated March 13, 2024, shall remain unchanged.

4. These guidelines are issued under the powers conferred by Sections 14, 15, and 41 of the Finance Company Act, 2023, and shall take effect immediately.

Yours faithfully,

(Gautam Kumar Ghosh) Director (DFIM) Phone: 9530178. 27 Agrahayan 1431 Date: 12 December 2024 Audit and Inspection Department