The interim government has instructed six state-owned commercial banks to terminate the contracts of their managing directors and chief executive officers.

The Financial Institutions Division (FID) of the finance ministry has issued this directive to the chairpersons of Sonali Bank, Janata Bank, Rupali Bank, Agrani Bank, Bangladesh Development Bank, and BASIC Bank.

As of the filing of this report, Janata Bank and BASIC Bank terminated the contracts of their MD and CEO Anisur Rahman and Md Abdul Jabbar respectively upon receiving the FID’s directive.

In separate letters to the banks' chairpersons, the FID directed the six state-owned commercial banks to take subsequent regulatory action in line with the Bank Companies Act and the agreements executed by the banks' boards of directors.

This marks the first instance of the interim government ordering the cancellation of top executive appointments in state-owned banks since the fall of the Hasina government on 5 August. Previously, when the governor and deputy governors of Bangladesh Bank, as well as chairpersons of commercial banks, resigned voluntarily or under pressure, the government did not revoke any appointments in state-owned banks.

According to FID officials, this decision is part of the interim government's efforts to reform the banking sector. The CEOs and MDs were appointed through agreements with their respective bank boards, thus giving the authority to terminate their contracts to the banks' boards or chairpersons.

They noted that the contracts contain specific provisions for cancellation, which comply with various conditions. The implementation of this directive will be executed through the company secretary, hence the instruction for chairpersons to proceed with the terminations. Following the cancellation of the current MDs, the FID will appoint new executives, they added. The government typically appoints MDs and CEOs of state-owned banks for three-year terms.

In a related development, the government on Thursday appointed Dr Fahmida Akter Khatun, executive director of the Centre for Policy Dialogue, as a director of Bangladesh.

BDST: 1826 HRS, SEP 20, 2024
MSK