Draft approved restricting family shares to 15pc in financial institution

Business Report :
An individual or a family will not be able to hold more than 15% of shares in a financial institution from now on, according to the final draft of the Finance Company Act, 2023.

In addition, there cannot be more than two directors from the same family in the financial institution board, stated the draft which was approved at the Cabinet meeting today with Prime Minister Sheikh Hasina in the chair.

The existing law does not have any provisions limiting the percentage of shares or the number of directors in regard to a single family.

Cabinet Secretary Mahbub Hossain shared the development in a briefing at the Secretariat on Monday.

“Non-banking financial institutions are operating with the Financial Institutions Act, 1993.

But when it comes to the implementation, there have been various inconveniences.

“Due to certain weaknesses of the Act, several challenges have arisen in the non-bank financial sector.

That is why the law is being updated,” he said.