Bank Company (amendment) Bill 2023 passes in JS amid opposition’s reaction

The Bank Company (amendment) Bill-2023 was passed in the Jatiya Sangsad today amid serious reaction showed by the opposition Jatiya Party lawmakers.

Finance Minister AHM Mustafa Kamal moved the bill and it was passed by voice votes with Speaker Dr Shirin Sharmin Chaudhury in the chair.

The opposition lawmakers in one stage walked out from the House protesting some articles of the amended bill.

Piloting the bill, the minister said the proposed act will bring a change of an earlier formulated act titled “The bank company act-1991” so that the country can establish a modern banking system.

Criticizing the proposed bill, opposition lawmaker Fakhrul Imam of Mymensingh-8 said that the new amendment bill has huge anomalies and it should be revised before passing the act.

Meanwhile, the Bank Company (Amendment) Act-2023 has been passed with the provision that not more than three directors of a bank can be from the same family.

Besides, the act also proposed strict measures in terms of borrowing by the board members from banks as submission of collateral was made mandatory for them.

The act said that currently there can be four directors from one family, but this has now been reduced to a maximum of three.

Sharing some of the proposed provisions, the minister said the banks must send the list of willful loan defaulters to Bangladesh Bank (BB) and it can impose a ban on overseas travel against them.

Strict measures are also related to the issuance of their trade license, and company registration under the Bangladesh Securities and Exchange Commission and the Registrar of Joint Stock Companies and Firms.

A willful defaulter cannot be eligible to be a director of a bank or financial institution until after five years have passed after being excluded from the list of willful loan defaulters, he said.

If any director of a bank becomes a willful loan defaulter, Bangladesh Bank can declare his post vacant, he also said.

If a bank fails to send the list of loan defaulters to the central bank in time, the bank can be fined Tk50 lakh to Tk one crore. The bank will have to count fines of an additional Tk1 lakh for each day’s delay.

According to the draft law, despite having the financial ability, if a person or institution fails to repay a loan, it will be considered willful default.

About the definition of a willful defaulter, he said: “If anyone takes financial benefits from a bank or financial institution providing false information in their names or of their family members, the individual will be considered a willful defaulter.”

At the same time, if someone states a specific purpose for taking a loan from a bank or financial institution, but uses the loan for other reasons, the recipient will be considered a willful defaulter.

“A provision is also included here so that Bangladesh Bank can regularly inspect different institutions and foundations run under the law,” he added.

The International Monetary Fund (IMF) in its $4.7 billion loan condition, had asked the Bank Company (Amendment) Act 2023 to be implemented soon.

The IMF also asked for non-performing loans for state-owned banks to be reduced by 10%. (BSS)