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The government has finalised a draft policy to standardise appointment, promotion and posting for senior posts at state-owned commercial banks, specialised banks and financial institutions. Titled “Policy for Appointment, Promotion and Posting of Managing Director, Deputy Managing Director and General Manager — 2025”, the draft updates the 2023 framework and adds several new requirements intended to reduce past inconsistencies.

Under the proposal, appointments to MD/CEO posts in state-owned commercial banks would be contract-based and made by the Financial Institutions Division (FID). Contract appointments — from serving or retired MDs and DMDs of state-owned banks and financial institutions — would be for up to three years.

Key changes and contested points

• The draft requires a minimum 20 years’ service counted from Grade-9, and at least two years’ experience as DMD, to qualify for promotion to MD.
• Candidates must hold at least a postgraduate degree; preference will be given to qualifications in economics, accounting, finance, banking, management or business administration. No third division/class is acceptable at any academic stage. Minimum grade/GPA thresholds (SSC/HSC and university CGPA) are specified and foreign degrees must be authenticated.
• Integrity and a solid reputation in the immediately preceding role are mandatory.

Concerns over competence and fairness
A senior central-bank official warned the 20-year rule lacks a clear breakdown of the type of experience required, which could undermine selection of truly capable executives. He urged that MD candidates should ideally have around 25 years’ service and demonstrated achievements across core banking functions — branch management, corporate banking, regional offices, international trade finance, general advances, industrial credit and treasury management — before being considered.

“MD selection must weigh professional banking knowledge and tangible achievements gained from field experience across major divisions,” the official said.

Analysts say the additional condition of two years as DMD may exacerbate historical disparities. Because state banks have followed different promotion practices over time, some executives advanced promptly while others lagged; enforcing a fixed DMD stint could penalise long-serving, experienced officers and allow relatively junior staff to leapfrog. To correct this, experts recommend counting total service and performance rather than rigidly requiring a two-year DMD tenure.

Policy is not enough — implementation matters
Economist M Helal Ahmed argued that a written policy alone will not remove discrimination. “Effective, merit-based implementation is essential. Even with board changes after a government transition, governance gaps persist. Consider forming an independent bank commission to strengthen oversight,” he said.

Bangladesh Bank told The Banking Post that appointment and promotion rules for state banks fall under the Financial Institutions Division, Ministry of Finance, not under Bangladesh Bank’s remit. “State banks are governed by FID; Bangladesh Bank does not supervise these matters. Issues can be resolved through dialogue with the division,” said Arif Hossain Khan, Executive Director and spokesperson of Bangladesh Bank.

Stakeholders expect the final policy to explicitly incorporate performance metrics and significant achievements so that leadership selection aligns with prudential standards, operational capability and good governance.