BB directive to supersede contradictory BSEC rules

Bangladesh Bank has sent letters to all banks and non-bank financial institutions directing to disregard the corporate governance code issued by the Bangladesh Securities and Exchange Commission (BSEC) in 2018 if it contradicts central bank directives.

The letters were sent to top officials last Thursday.

"Bangladesh Bank decided that there is no chance to follow the corporate governance code of 2018 if it contradicts any order of the central bank or financial institution act, including the code's directions on formation of nomination and remuneration committee," read the letter.

The order adds to a growing list of policy matters over which the two regulators have differing directives, which many analysts blame for a recent market fall.

Yesterday, the DSEX, the benchmark index of Dhaka Stock Exchange (DSE), dropped 50 points.

Parts of the BSEC's 2018 code contradicted the financial institutions act of 1993 but the central bank at that time did not issue any directive, said a merchant banker preferring anonymity.

But now the central bank is giving the order amidst its rift with the BSEC, he said, adding that the two regulators should sit together and resolve contradictory directives for the sake of the betterment of the financial market.