Appointment of chairmen and directors to state-owned banks, insurances, and financial institutions will pass through check-up by a scrutiny committee led by the financial institutions division (FID) secretary, following a reform recipe.
Officials say the government will form the gateway panel under decision made at a meeting Sunday, evidently in the process of changes aimed at much-envisaged good governance in the financial sector.
The decision comes as the FID, under the ministry of finance, has got down to reviewing a draft policy on appointment of chairmen and directors to "ensure good governance" in the sector.
Presently, proposals for appointment of directors to those banks, insurance companies, and financial institutions are forwarded to the Prime Minister's Office without a formal scrutiny as there is no designated body assigned to the task.
Sheikh Mohammad Salim Ullah, secretary, FID, presided over the meeting held few days after a loan-negotiating team of the International Monetary Fund (IMF) had suggested the government lower the number of bureaucrats from the line-up of directors in the banks, insurances, and financial institutions.
These in-service and ex-bureaucrats have insufficient knowledge on banking rules and loan-proposal review and so the IMF wants that directors should be appointed with "fit" persons following "proper" criteria.
Political persons used to dominate banks' boards which are now under control of present and former civil servants.
"We will follow the criteria mentioned in the bank companies' act," a joint secretary of the FID told the FE after the meeting, without elaborating on what changes may be in the offing as regards management of banks and financial institutions.
The official said a preliminary discussion on the draft policy was held Sunday and finalising it would take time.
In the wake of multifarious problems plaguing these institutions -- both in public and private sectors -- there have been pleas from economists and policy think-tanks for streamlining their top management. The ills they talk are ballooning non-performing loans, insider lending, forged loans, money laundering and so.
