The central bank issued an order yesterday preventing banks from allowing outsiders to attend board meetings and doling out undue privileges to directors.
It has been observed that people who are not members of the boards, such as directors' relatives and shareholders, are taking part in board meetings.
Along with the directors, only the managing director and the company secretary can attend the board meetings, Bangladesh Bank said in a notice.
However, bankers on an instruction from the boards could attend meetings during presentation of an issue they are associated with. But they cannot stay there for the whole time.
"The banks are being advised to ensure that no outsider or shareholders could attend any board meeting and its other auxiliary meetings," BB said.
The banking regulator also said there are allegations that some banks are doling out financial amenities to the directors beyond honorarium mandated by rules for attending board meetings, which is a clear violation of existing rules.
"The Banking Companies Act 1991 clearly states that the directors can't avail financial or any other facilities beyond specific fees for attending a board meeting," said the central bank, instructing banks to strictly comply with the rules.
The BB also directed the banks to place the notice at the next board meetings.