FE Report (March 29, 2011)
Bangladesh Bank (BB) will finalise the draft amendment to the Banking Companies Act by June, a central bank official told BSS Monday.
The final draft will take the major amendment process a step forward, but the fate of the much-talked about reform will depend on the active efforts of the higher authorities, the official said.
Finance Minister Abul Maal Abdul Muhith earlier told media that the Banking Companies Act would be amended by June this year to ensure more transparency in the financial sector.
Chairman of the Parliamentary Standing Committee on Finance AMH Mostafa Kamal said the committee was reviewing the pros and cons of the amendment to ensure a better legal framework for the country's financial sector.
Referring to the government's commitment to update the legal framework that governs the banking and financial sector, BB Executive Director Jahangir Alam told the news agency that a committee of the central bank would finalise the draft and submit it to the finance ministry by June.
He said the draft will have some major reform proposals to establish more transparency and accountability, removing the room for all sorts of conflict of interests in the financial sector.
The official, however, did not want to elaborate on the extent of the reform proposals.
A high official of the finance ministry said the government plans to place the final draft of the act before the parliament by year-end Joint Secretary of the Finance Division Amalendu Mukherjee said the finance ministry would hold a series of meetings with stakeholders on the draft after getting it from the central bank.
Framed in 1991, the Bank Companies Act has so far been amended twice in 1993 and 1995 to make it more effective in managing the financial sector in a better way.
The caretaker government in 2007 amended the law through an ordinance, but it did not come to effect as the then government later changed its mind and refrained from ratifying it.
The present government again initiated the amendment process as part of its plan to reform legal frameworks to expedite the country's business, trade and investment.
One of the major objectives of the reform process is to bring an end to the system of holding directorships simultaneously in more than one financial institution.
Sources said a group of directors of banks, financial institutions and insurance companies are opposing the reform process to protect their vested interest.
According to BB, there are at least 120 businessmen who are now enjoying dual directorships in a bank and other financial institutions or insurance companies.
The final draft will take the major amendment process a step forward, but the fate of the much-talked about reform will depend on the active efforts of the higher authorities, the official said.
Finance Minister Abul Maal Abdul Muhith earlier told media that the Banking Companies Act would be amended by June this year to ensure more transparency in the financial sector.
Chairman of the Parliamentary Standing Committee on Finance AMH Mostafa Kamal said the committee was reviewing the pros and cons of the amendment to ensure a better legal framework for the country's financial sector.
Referring to the government's commitment to update the legal framework that governs the banking and financial sector, BB Executive Director Jahangir Alam told the news agency that a committee of the central bank would finalise the draft and submit it to the finance ministry by June.
He said the draft will have some major reform proposals to establish more transparency and accountability, removing the room for all sorts of conflict of interests in the financial sector.
The official, however, did not want to elaborate on the extent of the reform proposals.
A high official of the finance ministry said the government plans to place the final draft of the act before the parliament by year-end Joint Secretary of the Finance Division Amalendu Mukherjee said the finance ministry would hold a series of meetings with stakeholders on the draft after getting it from the central bank.
Framed in 1991, the Bank Companies Act has so far been amended twice in 1993 and 1995 to make it more effective in managing the financial sector in a better way.
The caretaker government in 2007 amended the law through an ordinance, but it did not come to effect as the then government later changed its mind and refrained from ratifying it.
The present government again initiated the amendment process as part of its plan to reform legal frameworks to expedite the country's business, trade and investment.
One of the major objectives of the reform process is to bring an end to the system of holding directorships simultaneously in more than one financial institution.
Sources said a group of directors of banks, financial institutions and insurance companies are opposing the reform process to protect their vested interest.
According to BB, there are at least 120 businessmen who are now enjoying dual directorships in a bank and other financial institutions or insurance companies.
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