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Dhaka Tribune

Curious case of some big bankers resigning

Some blame the lack of corporate governance

Update : 13 Apr 2023, 08:07 PM

Various international donor organizations, including the World Bank and the IMF, have repeatedly stressed on proper corporate governance of Bangladesh's banking sector, a necessary call at a time when quite a few top bankers seem to be resigning from their position. 

While a few prominent officials, such as MDs and CEOs, retire immediately after their tenure ends, the majority of others depart before the end of their fixed tenure.

The question now is whether they are voluntarily stepping down or being compelled to do so due to pressure.

Anis A Khan, former chairman of the Association of Bankers of Bangladesh (ABB) and former Managing Director and CEO of Mutual Trust Bank Ltd (MTB), ssid: "It's become a major concern. Senior qualified bankers, in particular, are in a state of panic right now. And that does not speak well for the industry's future. Yes, not all banks, but a few are suffering from a lack of corporate governance, which is the root of the problem."

He explained the reason for this by saying: "One of the main reasons for this is a lack of corporate governance in the banking sector. The interference of senior management in particular. Few boards of directors continue to have power over management in matters such as loan approval and other critical decisions. In that situation, it's become extremely difficult for a qualified and senior banker to endure."

"As a result, you will see an increase in non-performing loans (NPLs) on the one hand and an increase in capital inadequacy on the other," he added.

Hasty resignations? 

According to media reports, two prominent bankers recently resigned from Islami Bank Bangladesh Limited (IBBL) after the board of directors verbally pressured them to resign.

IBBL's DMD, Md Siddiqur Rahman, submitted his resignation. When, barely a week before his departure, another managing director, Md Omar Faruk Khan, resigned.

They both declined to comment on the matter. 

Previously, Shah Syed Abdul Bari resigned as National Bank managing director in November 2021, just seven months after being appointed. 

According to media reports, Bari resigned from his position after being humiliated by one of the bank's board members that day.

Although in his resignation letter he cited health concerns as the reason for his resignation. 

What was also found is that a large number of bankers resigned before the end of their tenure. 

Mohammad Abdul Mannan was allegedly compelled to retire from Islami Bank Bangladesh before the end of his term, as was Mohammed Nurul Amin from Meghna Bank and Tariqul Islam Chowdhury and Md Golam Faruque from South Bangla Agriculture and Commerce (SBAC) Bank.

Majority of them cited personal reasons or claimed health issues as the cause for their resignations.

Khondoker Rashed Maqsood, on the other hand, resigned from Standard Bank Ltd in January 2023 after completing his three-year contract as managing director and CEO.

What former bankers say

Speaking with a few resigned senior bankers, they rejected the idea that they quit due to pressure.

Rahel Ahmed, Prime Bank's previous managing director and CEO, resigned in December 2020.

He did not, however, retire after resigning. He became CEO of Nagad, a digital financial services provider. Then, in August 2022, he founded Ogreem, a firm that promises to deliver on-demand salaries against earned ones to employees across numerous industries in order to satisfy any of their immediate financial demands.

When asked about his time at Prime Bank, he said: "In my case, I quit my job voluntarily. I wanted to assume responsibility for Nagad in particular at the moment."

"I don't think it's fair to judge the entire banking sector based on two or three banks," he pointed out.

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