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Saturday | September 19, 2026 | Dhaka

BB tightens rules for bank nominee directors

 Business Desk
 Published: 12:01 AM, 19 September 2026

Bangladesh Bank (BB) recently issued new directives on the appointment of “representative directors” nominated by shareholder companies to the boards of bank companies, aiming to ensure transparency and stability in bank ownership structures, reduce disproportionate investment by shareholder companies and protect depositors’ interests.

The Banking Regulation and Policy Department-2 of Bangladesh Bank issued the directive.

Under the directive, a company will not be allowed to hold shares in one or more bank companies with a purchase value exceeding the amount of its net worth.

If any company’s existing shareholding exceeds this limit, it will have to bring the holding within the prescribed limit within six months from the date of issuance of the circular.

The central bank also directed that a representative director nominated on behalf of a shareholder company must be the managing director or director of the concerned shareholder company.

Before appointing such a representative director, the shareholder company must ensure that the nominated person has a minimum 2 percent ownership of paid-up capital in the case of a public limited company and at least 20 percent ownership in other companies.

The person must maintain the required ownership throughout the period of serving as a representative director.

The directive further said applications seeking Bangladesh Bank’s prior approval for appointment, reappointment or replacement of a representative director must include documentary evidence proving the nominated person’s ownership or interest in the concerned shareholder company.

Representative directors already appointed on behalf of shareholder companies before issuance of the circular will also have to comply with the new requirements in case of their reappointment or replacement.

Bangladesh Bank instructed bank boards to place the issues covered by the circular before their board meetings for information and necessary action. Banks were also asked to bring the directive to the attention of their other officials and shareholders.

The directive was issued under the powers conferred by Section 45 of the Bank Company Act, 1991, and will take effect immediately.