Bangladesh Bank has tightened rules on corporate shareholding in commercial banks and eligibility for representative directors, aiming to improve transparency and protect depositors.
Under a new circular issued today (17 September), a company cannot hold shares in one or more banks worth more than its own net worth, based on acquisition cost.
The central bank has also tightened eligibility requirements for corporate nominees on bank boards. A representative director nominated by a shareholder company must be its managing director or director.
The nominee must also hold at least a 2% stake in a listed public limited company or 20% in other companies.
“These measures are aimed at ensuring transparency and stability in bank ownership, preventing investments disproportionate to a shareholder company’s financial capacity and protecting depositors,” a senior Bangladesh Bank official said.
Issued under Section 45 of the Bank Company Act, 1991, the directive takes effect immediately.
Banks must obtain prior approval from Bangladesh Bank for the appointment, reappointment or replacement of representative directors.
They must also submit documents proving the nominee’s required equity stake, according to the circular.
