BB approval must to sack NBFI MDs

March 26, 2015

Bangladesh Bank on Wednesday asked chairmen of non-bank financial institutions not to suspend their managing directors and chief executive officers without taking prior approval from the central bank. The BB has taken the initiative to give job protection for the CEOs and MDs as Bangladesh Leasing and Finance Companies Association, an organisation of the chief executives of the NBFIs, earlier told reporters that the jobs of CEOs were vulnerable as the boards of directors were able to suspend them without taking any approval from the central bank.
The BB issued a circular to chairmen of all NBFIs asking them to take permission from the central bank before at least one month from the starting period of the suspension of any MD and CEO.
The chairmen of the NBFIs will have to place a notice to the concerned MD and CEO before at least one month from the starting period of his or her suspension.
The BB also asked the MDs and CEOs of the NBFIs to inform it about their voluntary resignation before at least one month.
Besides, the MD and CEO, who will resign, will have to explain to the central bank why he or she was leaving the job, according to the BB circular.
The MD and CEO will have to place a notice to the respective board chairman explaining the cause of his or her resignation.
The NBFIs will have to appoint new MDs and CEOs within three months after the post of the chief executive becomes vacant.
The NBFIs will have to appoint acting MD and CEO for the interim period.
The BB will appoint administrator for the NBFIs if they fail to employ new MD and CEO within three months.
The BB circular said any person, who wants to get appointment as CEO and MD for a NBFI, would have to accumulate at least 15-year job experience in the banks and NBFIs.
The person will have to hold an immediate before post of MD and CEO for 2 years to take appointment to the top post of an NBFI.
The persons, who faced punishment by a criminal or civil court and regulatory organisations, will not be allowed to hold the post of CEO of the NBFIs.
The NBFIs will not be allowed to appoint a person, who is directly or indirectly responsible for cancellation or liquidation of a company’s licence, to hold their top posts.
Any loan defaulter or a suspended person from any company will not be allowed to hold the post of MD and CEO of any NBFI.
The persons have to attain post graduate degree from a recognised university to get appointed as MD or CEO of an NBFI.
The NBFIs will not appoint a person as MD and CEO if he or she holds directorship or business interest of a bank or NBFI.
A MD and CEO will be appointed for three years and he or she will be able to continue the job till the age of 65.
The central bank also issued another circular on Wednesday saying that the NBFIs will be able to appoint advisers and consultants for one-year and 2-year tenures respectively.

-Input from New Age

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