Bangladesh Bank announced rules for appointing banks’ independent directors setting the minimum age at 45 years and the maximum age at 75 years.Also, they must have at least ten years of experience in management or business or professional work.The central bank issued a circular in this regard on Wednesday.Earlier, Bangladesh Bank released a circular announcing the policy regarding the formation of the board of directors of bank companies.At the same time, the principles related to the responsibilities and duties of the directors have also been published.Regarding the educational qualification of the individual director, the central bank said the aspirant should be a graduate/post graduate in economics, banking, finance, business administration, law, accountancy or cost accounting from a recognised university.
Higher institutional education in Information Technology will be considered as an additional qualification for appointment of independent director of the newly introduced Digital Bank.
According to the circular, independent directors will be paid a fixed remuneration of Tk50,000 per month, although earlier independent directors did not have a fixed remuneration.
Apart from this, they will receive a maximum of Tk10,000 as honorarium for attending the meeting of the company's board, subsidiary committee. Earlier it was Tk7,000.
The definition of individual director has also been changed in the circular.
It states that, as interpreted in sub-section (9) of section 15 of the Banking Companies Act, 1991, “Independent Director” shall mean a person who is independent of the management and holding of shares of the banking company and who is solely in the interest of the banking company.
He or she also has no past, present or future real interest or apparent interest in the bank or any person associated with the bank.
As per the new policy, the board of directors will be maximum 20 and independent directors will be three.
However, if there are less than 20 directors, there cannot be more than two independent directors.
If the number of directors of the board is less than 20, the number of independent directors will be less by 2.
Generally, the independent directors will be appointed for a term of three years and at the end of the term may be elected.
The Board of Directors may request the Bangladesh Bank to remove the individual director concerned by specifying reasons.
An independent director can himself resign from the position of independent director by giving seven days' notice. Besides, Bangladesh Bank can remove any independent director citing specific reasons.
Independent directors cannot be tax defaulters. A person who has never been declared bankrupt by a court.
A person listed as a willful defaulter shall not be eligible to become a director of a bank until five years have elapsed after being discharged from that list.