BB seeks progress report on downsizing PCB boards

Suspecting reluctance from the private commercial banks (PCBs) in downsizing their boards of directors, the central bank has directed them to report on progress they have made in this respect.

The PCBs have been asked to inform the Bangladesh Bank (BB) within seven days about the steps so far taken to implement the central bank directive to make PCB policymaking board a maximum 13-member body.

The central bank in circular yesterday asked for relevant documents bearing signatures of the chief executive officers of the PCBs.

On April 26 this year, the central bank issued a circular directing the PCBs to slim down their board. It also directed that the directors who already served for six years in two consecutive terms would not be able to retain their directorship.

The central bank asked the private banks to bring the changes in their next annual general meetings. But sources at the central bank said a number of banks have resorted to various tricks to avoid compliance with the circular.

Some directors of a bank managed to obtain injunctions from lower courts in their favour so that the annual general meetings could not remove them. "Another bank postponed the AGM several times," a senior BB official said.

In the latest circular issued yesterday, the central bank said it wanted to see papers and documents in support of the PCBs' claim that they have taken steps to comply with the earlier directive of the central bank.

Another senior BB official said the central bank would take actions against banks for non-compliance of the order. "We may even suspend board of a bank if we find negligence on their part," the official said.

Only four banks have so far downsized their boards in line with the order of Bangladesh bank, he said.