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DHAKA: The government has decided to cancel the remaining terms of the contractual appointments of the managing directors (MDs) and chief executive officers of state-owned Janata Bank PLC and Rupali Bank PLC.
The Financial Institutions Division of the Ministry of Finance issued separate letters on Monday, October 19, conveying the government’s recommendation and consent for the cancellations. The letters, signed by Deputy Secretary Afroza Akter Riba, instructed the boards of the two banks to take the necessary steps in accordance with the applicable rules.
According to the letter concerning Rupali Bank, the government has recommended and approved the cancellation of the remaining contractual tenure of its managing director and CEO, Kazi Md Wahidul Islam. The bank’s board was instructed to take the necessary action in accordance with the Bank Company Act and the terms of the contract signed with the board.
A similar recommendation and approval were issued regarding the remaining contractual tenure of Janata Bank’s managing director and CEO, Md Mojibor Rahman.
The letters stated that the respective bank boards must complete the required formalities to cancel the remaining terms of the appointments in line with the government’s recommendations and consent.
However, the letters did not specify the reasons for the decisions. They only directed the boards to proceed in accordance with the Bank Company Act and the provisions of the relevant contractual agreements.
The changes in the top management of the state-owned commercial banks come at a time when the institutions are facing various challenges, including non-performing loans, loan recovery, capital shortfalls, liquidity management and corporate governance.
According to officials familiar with the matter, once the cancellation process is completed, steps may be taken to appoint new chief executives to the two banks. However, the Finance Ministry’s letters contained no specific instructions regarding the appointment of new managing directors.