The 'Bank-Company Bill 2017' was placed in Parliament on Tuesday aiming to allow upto four members of a family to become directors of any bank with a provision for the directors to hold their posts for nine years consecutively.
Finance Minister AMA Muhith piloted the bill in the House, seeking amendment to the Bank Companies Act 1991. The bill was then sent to the Parliamentary Standing Committee on Finance Ministry for further scrutiny. The Committee was asked to submit its report within the next two months.
According to the existing Bank-Company Act 1991, two members of a family can be directors of a bank, while tenure of a bank director is three years and the director can be disqualified for re-election after completion of two consecutive terms (six years) unless s/he elapsed three years.
But the bill placed today states that a director can be disqualified for re-election on completion of nine consecutive years unless s/he elapsed three years.
Arguing for allowing four members instead of existing two from a family to become directors of a bank, the objective of the bill states that if any member of a family conducts separate business and pays tax, the person can't be called a dependent on the family. But such members of a combined family can't be the director due to the existing provision, if two of them already are. So an amendment to the provision has been proposed, it added.
However, Jatiya Party MP Fakhrul Imam raised his objection over the placement of bill in the House saying that the proposed amendment goes against the spirit of the Constitution.
"We'll see a new system of 'family banks,' if four members from a family are allowed to be directors of a bank. Corruption has already engulfed the entire banking sector due to allowing two members from a family to become directors (as per the existing provision)," he said.
Noting that it is also unethical, he said the law is being amended only for particular individuals.
Fakhrul Imam urged the Finance Minister to withdraw the bill.
In response, the Finance Minister said the MPs will have scope again to raise their remarks in this regard when the bill will be moved for passage in the House.
Earlier on May 8, this year, the Cabinet cleared the draft of the Bill.
In 2013, the government amended the act restricting the number of directors from a family on the board to maximum of two, to check irregularities and indiscipline, said officials.
In October 2016, Bangladesh Association of Banks, an organisation of the private bank owners, demanded the amendments to the act at a meeting with the finance minister.