JS body backs changes
The parliamentary standing committee on the finance ministry yesterday recommended passing the Banking Companies (Amendment) Act-2017 in line with the changes planned by the government.
"The committee will place its report in parliament tomorrow (today)," Awami League Lawmaker Abdur Razzaque, chief of the parliamentary watchdog, told The Daily Star after a meeting at the Jatiya Sangsad Bhaban.
The act proposes doubling the number of directors in a bank's board from a single family. Currently the figure is two.
It also proposes that the tenure of the shareholding directors be extended from six to nine years and that they be allowed to become directors again after a three-year hiatus.
Economists and former central bankers opposed the amendments saying it would harm depositors' interests and that the government was bowing to pressure from businessmen.
The parliamentary body in an October meeting had postponed discussions on the Act as Finance Minister AMA Muhith was not present.
Razzaque at that time told reporters that the body wanted to ask Muhith the reason for the proposed changes as the civil society and people related to the banking sector were speaking against the amendments.
Yesterday he said although he had some reservations, the body unanimously took the decision keeping it unchanged.
The bill is likely to be passed in the ongoing session of parliament.
When asked why the body did not hold elaborate discussions, especially on the proposed changes, Razzaque said the committee members did not oppose any provision.
The cabinet on May 8 approved the proposed amendments.
At the time, Mirza Azizul Islam, a former adviser to a caretaker government, told The Daily Star, "This is definitely not desirable from the point of good governance in the banking sector.
"I think the government has surrendered to the pressure exerted by the business lobby. Other than this, I don't find any justification."
The Act was placed in parliament on September 12 amid strong opposition from Jatiya Party, which termed the government move unethical.
The Act was last amended in 2013 regarding shareholding directors' tenure and how many of a family could become directors. The changes were in line with the advice of the International Monetary Fund and came against the backdrop of directors getting involved in irregularities.