The private sector banks in Bangladesh are set to see a major reshuffle on their boards with about 130 directors losing their jobs by October 2008 under an amended banking law, officials said.
More than half of the country's private banks would either have to induct new directors or thoroughly rearrange their boards after October next year to comply with the amended Bank Company Act, The New Age newspaper said quoting officials of the central Bangladesh Bank.
The act, promulgated in October 2007, stipulates that no person will be allowed to serve as a bank director for six consecutive years and if any director exceeds six years in job, he or she will be dropped from the bank board within one year from the promulgation of the ordinance.
Out of 31 private banks, 18 will see a major shake-up of their boards as the interim government in emergency-ruled Bangladesh installed on January 12 with crucial military support spearheads a massive institutional reform campaign alongside an anti-graft drive.
The report said Al-Arafah Islami Bank will top the list with 21 directors being removed while it would be followed by United Commercial Bank Limited (UCBL) which is to remove 19 directors. Al-Arafah, UCBL, Pubali, Premier, City and SIBL banks would have to reconstitute their boards entirely after October 2008.
"Banks are not like other companies as they deal with depositors' money. The boards must enjoy full confidence of depositors in particular and people in general," a central bank official said, hoping that the amended law will ensure good corporate governance in the banking sector.