Bangladesh Bank released detailed guidelines today for non-bank financial institutions (NBFIs), focusing on default loan recovery targets and criteria for appointing managing directors (MDs) and chief executive officers (CEOs).
Similar criteria were issued a month ago for MDs and CEOs of banks, aiming at ensuring good governance and reducing bad debts.
Twelve NBFIs in Bangladesh are currently without an MD or CEO, with most of these positions vacant for over three months, breaching laws.
The sector faces challenges including scams, irregularities, a liquidity crunch, and a large amount of non-performing loans.
Bad loans at the 35 NBFIs stood at Tk 216.58 billion by September last year, marking a 9% increase from June and 25% from a year ago.
The guideline emphasizes setting specific targets for defaulted and written-off loan recovery for CEO appointments or reappointments, aiming to reduce bad loans.
Candidates cannot have business interests in the bank or be involved with any association or institution of any director of the NBFI.
Detailed information must be provided if the candidate has citizenship in another country or is applying for residency elsewhere.
Approval is needed from Bangladesh Bank for frequent personal or family-related travel abroad, with a maximum age limit of 65 years and a requirement of at least 20 years of banking experience.
The central bank will approve CEO appointments based on recommendations from a committee led by a deputy governor.
