Staff Correspondent

The top executive position in the banking sector is the Managing Director (MD).

The board of directors takes the policy decisions of the bank. If a decision is to be approved in the board , the agenda must be presented to the MD. If the agenda is approved in the board, the responsibility also falls on the MD.

As a result, in many cases the relationship between the board of directors and the MD of the bank became sour-sweet. The directors forced the MD to resign due to this. The latest such incident happened with Mehmud Hossain, MD of the National Bank.

To avoid such a situation, that is to protect the MDs, Bangladesh Bank ( BB) issued a notification in 2014 and said that if a MD wants to resign voluntarily before the end of his term, he should submit an application to the chairman of his bank and Bangladesh Bank, stating the reason for his resignation, one month in advance. No one's contract can be canceled or forced to resign without the approval of Bangladesh Bank.

Several MDs in the National Bank were forced to resign after the notification was issued. During the change of ownership in 2017, the same happened to the MD of Islami Bank and Social Islami Bank.

Again, two MDs of South Bengal Agriculture and Commerce Bank also had to resign before the end of their term. In these cases the central bank rules were not followed and later the central bank did not take any action.

Instead, the next MD gave quick approval. As a result, even though the notification has been issued, this order of the central bank is practically confined to the notification. There is no precedent that Bangladesh Bank has given protection to any MD so far.

BRAC Bank Chairman and Policy Research Institute (PRI) Executive Director Ahsan H. Mansoor told the media, there are more than 60 banks in the country. There are maximum 15 eligible MDs. Banks whose board is good, their MDs are also competent and professional. But all MDs need to have courage even if they are not qualified.

If there is any illegal pressure from the board, it should be reported to the central bank, they can also tell the media. Only then will you get protection. But not everyone has the courage to be involved in irregularities. If it is not there should not be MD position. The post of MD is not just a job, but also a big responsibility.

Governor Abdur Rauf Talukder recently said in a meeting with the MDs of the bank that if there is any irregularity pressure from the board, it should be reported to Bangladesh Bank. Bangladesh Bank will provide protection to MDs. However, so that loans are not disbursed through irregularities. The governor gave this message to the MDs after the issue of irregularity in the disbursement of loans from some Shariah-based banks, including Islami Bank, came into discussion.

However, bank MDs still cannot trust the central bank. Because, there are allegations that Bangladesh Bank has lost the power to take decisions against the owners of some banks. The central bank ordered to take disciplinary action against some officials of Islami Bank, but the bank did not comply.

However, Governor Abdur Rauf Talukder said at the monetary policy announcement ceremony on January 15 that he does not consider any external pressure as pressure. The bankers could not trust that either. And some bank managers do not want to accept the central bank as a regulatory agency. In such a situation, National Bank MD Mehmud Hossain was summoned to the Banani residence of the Sikdar family on Monday. At that time the director of the bank Ron Haque Sikder and Rick Haque Sikder were present.

MDs are asked to send loan proposals of two institutions of their choice to the Board. If you don't agree to it, there is an unpleasant situation. At that time, Mehmud Hossain's mobile phone was disconnected. Then last Wednesday he resigned from the bank.

It appears that in many cases bank MDs also keep pace with the board for extension of tenure and additional benefits. After the completion of the service period in the bank, they join other institutions owned by the directors or other banks.

Such incidents have happened in National, Islami, Premier, Exim, NRB, First Security, Social Islami and many other banks. Meanwhile, many central bank officials also joined private banks after retirement. As a result, the role of Bangladesh Bank as a regulatory body is becoming shorter.

Sector-related people say that in such a situation, the powers of the central bank should be exercised. An example must be set by taking action against the guilty directors, even if they are influential. Only then will the confidence of the bankers return to the central bank.