A LEADING daily on Monday reported that three major state-owned banks (SOBs) such as Sonali, Agrani and Rupali Bank are running without their Managing Directors (MD) and Chief Executive Officers for many days. The Managing Directors of Sonali Bank and Rupali Bank have gone on retirement while the post of MD of Agrani Bank remained vacant following his dismissal due to irregular loan operation. Bank management is largely dependent on the Chief Executives of the banks and it is not difficult to understand how these banks are operating without the man on their top management.
The banking sector is facing growing challenges from political instability and business uncertainties. Inefficient bank management, frauds and corruption in loan management and political interference in decision making are some of the very big problems holding the banking hostage all the time. The Managing Directors always handle such problems and often they also succumbed to pressure and take risky decisions. But when these posts remain vacant for weeks and months, it makes those banks more vulnerable to be mishandled by inept persons holding the charge on temporary basis.
According to Banking Company Law, if the post of the MD remains vacant, respective banks must fill up the posts. If three months passed without recruitment, Bangladesh Bank has the authority to recruit an administrator of equivalent status in a public bank. It is worrying that BB has not taken effective action so far in this regard.
It is also frustrating that the Boards of the Banks are reluctant to take necessary initiative to recruit officers as the Finance Ministry exercises power in such recruitment where political consideration works more than qualification of a candidate. If the MD is not a man strongly owning the ruling party politics, he has no chance to be recruited or sustain pressure in his new post. There may be lot of lobbying behind the screen but the posts in the banks remained vacant.
Experts opined that undue interference or wrong policies of the government have made the banking sector vulnerable to sanctioning loans to fictitious business projects or rescheduling loans with longer repayment period when banks are suffering from capital shortage. But absence of MDs is altogether unthinkable for longer period. We agree with experts’ suggestions that the government should set up a Banking Commission to clear the mess and make bank management more transparent and accountable.
Moreover the Finance Ministry should hand over recruitment of MDs to the Board of the respective bank or to Bangladesh Bank under strong operational guidelines. The government should not keep MDs’ posts vacant in important banks only because of political or such other reasons. Banks must be allowed to function on corporate basis and recruitment must also follow on the basis of corporate rules.
