Banks asked to bring down directors from same family to 3

The central bank today instructed banks to bring down the number of directors from the same family to three in line with the Bank Company (Amendment) Act 2023 within the shortest possible time.

A maximum of four members from a family were allowed to seat on the board of a bank at the same time as per an amendment of the Bank Company Act 1991.

The modification was made in 2018.

But the new Act, which was passed in parliament on June 21, specified that the number of directors from a single family can't be more than three.

The concerned directors should reach a mutual understanding if one of them has to be resigned from the board in order to comply with the law, said the central bank in a notice yesterday.

If they fail to reach any mutual understanding, a lottery has to be held at a board meeting to pick the director who would have to step down, it said.