BB asks banks not to appoint their ex-top executives as consultants

Any private commercial bank (PCB) is not entitled to appointing any of its former managing director or chairman or director or adviser as a consultant in the bank, according to a central bank directive.
The circular issued yesterday by Bangladesh Bank (BB) said the PCBs would not be allowed to provide any other benefits than monthly salary or lump sum at a time for any appointed consultant.
The circular, which contains terms and conditions for appointing a consultant and his or her discretion, has already been sent to all PCB managing directors and chairmen.
The banks have been directed to appoint consultant for some specialised jobs like tax, legal issues, engineering, vocational training and information technology only after getting endorsement from the Board of Directors of the bank concerned.
The BB also asked the banks not to go for appointing any consultant, if regular officials are able to do any specialised job the bank concerned want to get it done.
Any consultant should not go beyond responsibilities as defined in his or her service rules, the central bank warned, suggesting no administrative power for such consultant.
As per the circular, the banks should send bio-data of their consultants to the central bank immediately after appointment of those, also mentioning their job descriptions.
Earlier on Sunday, at a meeting with the chief executives of all banks the BB expressed its disappointment that the private banks were using disqualified managing directors as consultants, often paying them huge salaries and benefits.
The central bank said in a market-based economy private banks can recruit required manpower. But when a managing director had been disqualified in line with the Bank Company Act and was then appointed by a bank as a consultant it must hinder good governance of the bank.
On occasions the disqualified individual has taken around Tk4 lakh salary a month as a consultant besides a generous benefit package that includes telephone costs, gratuities, medical allowance and transportation.
The central bank said although the Bank Company Act disqualified some managing directors, they were reappointed in roles such as chief consultant, consultant or executive consultant with the banks they served earlier.
The banks that appointed disqualified managing directors as their consultants are Shahjalal Islami Bank, One Bank Limited, Standard Bank Ltd and Mutual Trust Bank Ltd.
According to Bangladesh Bank, a total of 14 out of 29 private banks have appointed consultants.