Independent director's family barred from holding shares in the bank
To ensure good governance, the Bangladesh Bank has made it mandatory for an independent director to be between 45 and 75 years old, and none of their family members can hold shares in the bank.
"If any complaint is proved against an independent director, the Bangladesh Bank will take action against him as per the Bank Company Act," according to a circular issued by the central bank today.
In addition to having 10 years of management or professional experience, independent bank directors must hold a master's or post-master's degree in economics, banking, finance, business administration, law, or accounting from a recognised university.
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Additionally, independent directors cannot be tax defaulters or declared bankrupt by a court. A person listed as a willful defaulter is ineligible to become a director until five years after being discharged.
An independent director cannot hold any profitable position in the respective bank.
The policy states that the maximum tenure of an independent director will be three years. At the end of the term, the bank can again select them for another term according to company law.
The Bangladesh Bank can also appoint independent directors if necessary. The board of directors may request that the banking regulator remove the independent director by mentioning specific reasons. But a bank itself cannot remove an independent director under any circumstances.
The independent director himself can resign from the position with a seven-day notice. The Bangladesh Bank will take action if the complaint against the independent director is proven. Besides, the central bank can remove any independent director by mentioning specific reasons, according to the circular.
