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Ibrahim Khaled: Bankers should protest the new Bank Company Act

  • Published at 02:18 pm October 13th, 2017
  • Last updated at 04:15 pm October 13th, 2017
Ibrahim Khaled: Bankers should protest the new Bank Company Act
Bankers should speak out against the proposed changes to the Banking Company Act 1991 which are set to receive parliamentary approval soon, the former deputy governor of Bangladesh Bank said yesterday. The amendments tabled by the Finance Ministry in the new Bank Company Act were passed by the cabinet on May 8 and include increasing the maximum tenure of the board of directors of private banks from six years to nine years, and allowing four members of a family to sit on a board instead of two. "Because of interference by directors, banks have already been transformed into a 'grocery shop' for friends and family members," former deputy governor Khondkar Ibrahim Khaled said. "If the new law is enacted, then bankers would not be able to work at all. We as citizens are going to have to raise our voices against the amendment to the law and you people (bankers) should protest from your professional position." The former deputy governor was addressing a research workshop on 'Exploring Merger and Acquisition in the Context of the Banking Sector of Bangladesh,' organised by the Bangladesh Institute of Bank Management (BIBM) at its headquarters in Dhaka. He said that the global context of merger refers to when two organisations merge for the expansion of their business and for reducing operational costs. "In Bangladesh, and especially in the banking sector, mergers only happen when a company takes over the abandoned property of another company. Which is why mergers are usually between two weak banks that gives birth to another weak bank," he said, citing the Bangladesh Development Bank Limited (BDBL). "During a merger, the central bank can seize the shares from the banks and then coordinate for transforming the banks from being weak to healthy bank. That means, the central bank has to be a facilitator, not an actor." Also at the workshop, BIBM Director for Dhaka School of Bank Management Professor Md Mohiuddin Siddique presented a research paper which claims 72% of the bankers are in favour of reducing the number of banks in the country, with only 11% opposed to the merger process. Speaking as the chief guest, BB Deputy Governor SK Sur Chowdhury said: "Business restructuring like mergers and acquisitions is one way to get a solution for weak banks in the industry." The deputy governor said that in order to meet the demand for corporate restructuring, Bangladesh Bank had issued guidelines for banks and financial institutions in 2007 covering matters like legal issues, proposal of merger/amalgamation, commencement of the due-diligence, submission of due-diligence report, consent of the shareholders, examination of draft scheme, and the valuation of assets and liabilities. BIBM Supernumerary Professors Helal Ahmed Chowdhury and Md Yasin Ali also spoke at the event, among others.
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