Trust Bank gets BB exemption for multiple nominee directors

Bangladesh Bank has allowed Trust Bank PLC to appoint more than one director to its board by exempting the lender from a provision of the law.

The central bank issued a notice permitting the Army Welfare Trust, the sponsor shareholder of Trust Bank, to appoint multiple directors to the board by exempting the bank from Section 23 of the Bank Companies Act, 1991, as amended in 2023.

Section 23 states that no more than one person shall be appointed as a representative director on behalf of any institution or company on the board of directors of a banking company.

A senior official explained that the number of sponsor shareholders in banks generally remains higher.

Since Trust Bank has only one sponsor shareholder—the Army Welfare Trust—the provision has been relaxed to enable the appointment of more directors.