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Daily Business News All Daily Business News
19 Mar 2013
Revised Bank Company Act gets final govt nod

The cabinet on Monday gave its final approval to an amendment to the Bank Company Act 2013, allowing a bank to have a maximum of 20 directors.
The existing act does not specify the maximum number of directors a private commercial bank
may have. It, however, puts the number at 13 for a state-owned commercial bank.
The proposed revised act was passed by the weekly cabinet meeting chaired by the prime minister, Sheikh Hasina, at secretariat.
Cabinet secretary Muhammad Musharraf Hossain Bhuiyan told reporters after the meeting that the amendment aimed at bringing more discipline in the banking sector.
The cabinet had given its provisional approval to the proposed revised act early this month, Musharraf Hossain said, adding that there were slight changes in the amendments proposed in the provisionally approved revised act.
The number of directors is one of the major changes, he said.
He said four of the maximum 20 directors would be appointed as independent ones.
As per the proposed provisions, a director cannot be appointed for more than two consecutive tenures of a maximum of three years each and no one can hold directorship at more than one bank simultaneously.
The existing Bank Company Law was amended last in 2003.
The cabinet secretary pointed out that many a change had been brought to the banking sector nationally and internationally over the last 10 years, especially in cross-border banking supervision.
The draft law has a provision for imposing a maximum fine of Tk 20,00,000 on a banking company as a penalty for investing more than 10 per cent of its paid-up capital in the capital market, he said.
In the case of a continued violation of the provision, Tk 50,000 will be fined per day from the second day of the violation, Musharraf added.
The proposed act suggested measures for preventing illegal banking activities by any cooperative society.
It makes it mandatory for any non-bank organisation to get approval from the central bank for collecting deposits from the public.
The proposed act also empowers the Bangladesh Bank to remove any chief executive officer of the state-owned banks.
Under the existing law, the government holds the power of removing the chairmen, directors, and other high officials, including managing directors, of the state-owned commercial and specialised banks.

Source :: New Age