Financial institutions (FIs) will not be permitted to have more than one representative director on their board of directors from sponsoring companies, according to the Bangladesh Bank on Wednesday.
Usually, such sponsoring companies appoint more than one representative on the board, in a bid to keep control over the activities of the FIs.
FIs include leasing, housing and similar other companies.
If anyone is already a sponsor director in any FI, there will be no representative director, the Bangladesh Bank (BB) notice said.
The BB also said any director of the finance company who is a natural entity representing shareholders on the board, will remain in the same position as no further representation will be allowed.
People aware of the development said the purpose of the BB directive is to strengthen the board of FIs.
