The Bangladesh Bank is likely to reassess the mandatory 2 per cent shareholding requirement for becoming a director in a commercial bank, said BB governor Ahsan H Mansur.
While announcing the monetary policy for the second half (January鈥揓une) of FY25 on Monday, Mansur stated that the Bangladesh Bank Order and Bank Company Act would be reviewed and modernised with the help of international expertise.
鈥楢ll provisions in these laws will be reassessed to determine their necessity and effectiveness in the financial sector,鈥� he said.
The Bangladesh Securities and Exchange Commission, which is stock market regulator, made it mandatory for each sponsor director to hold minimum 2 per cent shares of a company鈥檚 paid-up capital by issuing a directive on November 22, 2011. The directive was amended on May 21, 2019, imposing more restrictions.
It is also must for all listed banks.
According to the rules, if any director fails to comply with the 2-per cent shareholding rules, his/her position would be automatically vacated.
Mansur also mentioned that the BB would reconsider whether bank boards should have 20 directors.
The number of independent directors will also be reviewed and he personally believed that they should constitute 50 per cent of the board.
鈥楾he current tenure for directors is irrational and should be shortened in line with international best practices,鈥� he added.
He emphasised that several issues within these laws need to be adjusted to enhance governance and efficiency in the banking sector.