Chairmen of banks can be directors in subsidiaries abroad

Bangladesh Bank has relaxed the rules for the chairmen of banks to hold directorship in subsidiaries abroad, according to a notice issued yesterday.

The central bank in May last year barred chairmen and board members of banks from holding the positions of directors in the boards or governing bodies of the subsidiaries or foundations established by the banks.

In its circular, the BB said chairmen of boards of banks would be able to become directors at the board of the subsidiaries such as exchange houses, money transfer operators or finance companies abroad.

The BB said the decision was taken to avoid losses by banks and ensure proper utilisation of the funds allocated for their subsidiaries.

The central bank directive said amid the ongoing Russia-Ukraine war, the collection of remittance and operation of subsidiaries abroad are facing more challenges than before.

Lack of proper experience and expertise in dealing with management risks can create the possibility of losses for banks and negatively affect their image, it added.