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No top bureaucrat can be chairman or director of public-sector commercial banks and financial institutions under a new rulebook in the making to rectify past misrule that bred massive scams, officials said.

The post-uprising Bangladesh government is preparing the guidelines for appointing Chairman and Directors at these institutions as part of its vast reform recipe, including in banking and financial sector.

After the appointment/selection of the directors, their continuity would be based on their annual-performance report, to be reviewed by the Chairman of the board, official sources said.

Among the directors a chartered or cost management accountant, a lawyer and a skilled banker must be included, they said.

“A director or chairman would be allowed to continue for maximum two terms,” reads the draft guideline, being prepared by the Financial Institutions Division (FID) under the Ministry of Finance (MoF).

“As a reform initiative of the interim government, the FID has drafted the guidelines for appointing Chairman and Directors at the nationalised commercial banks, financial institutions and private-sector banks where the government has shares,” says FID official.

“The draft guideline is likely to be approved shortly after the Finance Adviser returns home from overseas visit,” a senior FID official told That.

The government has taken the initiative to streamline the banking operations and establish governance against the backdrop of massive scams and irregularities in the country’s banking and financial sector during the last Sheikh Hasina regime that came to an end in last year’s mass uprising.

Billions of dollars have allegedly been laundered from the banks and financial institutions for what analysts and officials say a lack of corporate governance.

According to the banking-guidebook rules, a serving secretary in government or one in the similar position wouldn’t be allowed to become director of the board of directors.

Besides, the tenure of the directorship would be for maximum three years and non-directors would be able to appoint for 3rd time after completion of two-tenure consecutively, they said.

“After completion of the directorship for consecutive two tenures, he/she will be eligible for the next term only after three years from his last day in the banks,” the draft reads.

A selection committee in the government would be formed for appointing the chairman and directors at the nationalized commercial banks, financial institutions and private sector bank where the government has shares.

According to the draft, the Chairman would review the performance annually of his directors and gives report to the higher authority. The continuation of the directorship for the subsequent next years would be depending on the Chairman’s report.

The Chairman’s performance would also be reviewed by a higher authority where Minister/Advisor and Secretary level official will be there, the ministry officials said.

There will be some specific eligibility criteria for appointing the director of the board of the banks or commercial institutions. The directors would have minimum educational background, banking or financial sector experiences and some other eligibility, it said.

According to the proposed guideline, the director would be appointed from the economics, financial and banking, money market, capital market, monetary and financial management, credit-risk management, corporate governance, business education, business administration, agriculture, industry, law, and ICT sectors.

For enlisting in the fit list, the aspirant directors must have to be ethically and financially honest and no corruption-or loan-default charges are allowed.

A senior MoF official says immediate after the finalising of the guideline, every director is expected to be skilled and experienced for giving correct decision and judgment on the banking operations.

The guideline is expected to be finalised within this month of September, he says.

Syed Abu Naser Bukhtear Ahmed, Chairman of Agrani Bank PLC, hails this management overhaul as a very good step of the government.

“There should be some checks and balances in the banking operations, which is expected to be ensured through this proposed guideline,” he told That.