Bangladesh Bank tightens grip on governance; Dhaka Bank MD resigns amidst scrutiny
In a major shake-up of the country’s banking sector, Bangladesh Bank has demonstrated its firm resolve to establish good governance, with a dozen managing directors (MDs) stepping down from their posts over the past year.
The latest to resign is Sheikh Mohammad Maruf of Dhaka Bank, who quit less than a year after taking the helm. He submitted his resignation last Thursday, citing growing internal pressure following the recent change in government.
Sources at the bank said that several former and current board members became highly active, creating internal turmoil. Maruf joined Dhaka Bank in October 2023, after serving as an Additional MD at City Bank. He could not be reached for comment.
Dhaka Bank Chairman Abdul Hai Sarker confirmed the resignation, stating, “We did not have any issues with him personally. However, he failed to comply with some Bangladesh Bank rules.”
Sarker added that the resignation letter had been received and a board meeting on Monday would decide on the matter.
The central bank’s tougher stance on compliance is a marked shift, with a new focus on holding top executives, including MDs and CEOs, accountable for financial irregularities and non-compliance with banking rules.
Governor Dr. Ahsan H. Mansur is reportedly prioritizing transparency in bank management and decision-making, which has brought to light hidden irregularities in several institutions.
According to banking regulations, an MD or CEO, as the chief executive, is responsible for maintaining sound governance. Financial misconduct cannot occur without their knowledge, and if detected, it must be reported to Bangladesh Bank. In cases where the board of directors pressures an MD to engage in irregularities, the MD is expected to inform the central bank, which can intervene and, if necessary, dissolve the board.
The recent wave of resignations stems from managing directors’ failure to adhere to these rules or their complicity in misconduct.
Maruf’s departure follows a trend of resignations in early August, where MDs from three other banks—Southeast Bank, Meghna Bank, and Commerce Bank—also stepped down within a week. Bangladesh Bank regulations state that an MD’s resignation is not effective immediately and requires central bank approval.