12:00 AM, December 19, 2012 / LAST MODIFIED: 12:00 AM, December 19, 2012

Cost of being a minister

Rules bar Home boss from holding top post in new bank

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Staff Correspondent

MK Alamgir

Home Minister Muhiuddin Khan Alamgir may lose the chairmanship of the proposed Farmers' Bank, as rules do not permit a minister to hold a position in a profit-making venture.
Present and former officials of the central bank gave examples of past incidents when two ministers had to resign from the posts of chairman and adviser of banks before taking the charges as ministers.
However, the central bank will make a final decision in this regard when the proposed bank will get its licence, said a Bangladesh Bank official.
Former central bank deputy governor and the incumbent chairman of Bangladesh Krishi Bank, Khondker Ibrahim Khaled, said nobody could become the chairman of a commercial bank while continuing as a minister.
Khaled added when the Awami League was in power during 1996-2001, Md Abdul Jalil was the chairman of Mercantile Bank Ltd, but he resigned from the chairmanship when he was made commerce minister.
Also, during the last BNP rule, the then housing minister Mirza Abbas resigned from the post of an adviser to Dhaka Bank Ltd after taking charge of the ministry, said the BB official.
Khaled said the Banking Companies Act does not specifically say anything in this regard, but as per general norms of the central bank, a minister cannot be the chairman of a commercial bank.
Also, under the constitution, a minister cannot hold any position in a profit-making venture, said the former BB official.
If a minister becomes the chairman of a bank, he may favour the bank through using his powers as a minister, causing injustice to other banks, he added.
The central bank in April gave approval to nine new banks, including The Farmers' Bank. The proposed chairman of the bank is Muhiuddin Khan Alamgir who became minister in September.
The proposed banks have already applied for licences and their eligibility is being scrutinised.

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