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BB issues detailed directive on appointment of MD, CEO for NBFIs

Individuals found to be involved in financial irregularities will be barred from leading Non-Bank Financial Institutes (NBFIs) as managing director or chief executive officer.

The Department of Financial Institutions and Markets of Bangladesh Bank issued detailed guidelines on the appointment of MDs/CEOs for NBFIs on Monday. The move had been sounded out by the central bank in recent weeks, as part of large-scale reforms aimed at ensuring good governance in the financial sector, reports UNB.

The directive was sent to the top executives of NBFIs for immediate execution adhering to the guidelines contained in it.

The notification from Shapla Chattor stated that if an individual is involved in financial irregularities of any kind during their tenure at a bank or financial institution, they cannot be appointed as MD or CEO of an NBFI. If irregularities surface during a person’s tenure as MD/CEO, they cannot be reappointed to the position.

According to the circular, a person convicted by a criminal court or involved in forgery or financial crimes cannot be appointed as managing director of an NBFI.

Among the qualifications, it states that the individual should not have violated the rules and regulations of any regulatory authority, or been associated with any establishment whose registration or license has been cancelled, or has been decommissioned.

In order to become an MD, one must have at least a master’s degree from a recognised university. Higher institutional or professional education in economics, accountancy, finance, banking, management or business administration, will be considered as an additional qualification of the concerned person.

Third division or class at any stage of education cannot be eligible for the MD and CEO post.