BB raises experience bar for appointing bank MDs, CEOs

Business Report :

The Bangladesh Bank has introduced stricter experience requirements for the appointment of managing directors (MD) and chief executive officers (CEO) in the country’s banking sector, aiming to ensure stronger leadership and more seasoned expertise at the top level.

In a circular issued Wednesday by its Banking Regulation and Policy Department, the central bank announced that candidates must now have a minimum of three years of combined or individual experience as additional managing director (AMD) and deputy managing director (DMD) to qualify for the MD position.

Previously, banks were required to appoint individuals who had completed at least two years in their immediate past role. However, the earlier guideline did not specify whether that experience had to be in AMD or DMD positions, leaving banks with wider flexibility in candidate selection. The new circular removes that ambiguity, making AMD/DMD experience mandatory, and marking a significant tightening of leadership qualification standards.

In addition, the Bangladesh Bank has broadened the pool of eligible candidates by allowing nominations from regulatory bodies. Individuals with at least 25 years of experience in first-class or equivalent senior positions in regulatory institutions within the banking and financial sector-and who have served in Grade-2 of the national pay scale may also be considered for the MD role.

Central bank officials said the revised guidelines aim to strengthen corporate governance, ensure experienced leadership, and enhance risk management capacity in the banking sector at a time of rising financial stress. The move also seeks to reduce the appointment of less-experienced executives to top positions, which, officials said, has occasionally been linked to operational lapses, credit risk mismanagement, and weakened oversight in some banks. Observers welcomed the decision, noting that the changes could foster greater confidence among depositors, investors, and regulatory authorities while promoting professional development within the sector. Officials also emphasized that the move aligns with international best practices, reflecting a broader effort to modernize governance frameworks and reinforce accountability across the banking industry.