Due to the pressure of the default loans and multifarious financial irregularities, a good number of the bank’s managing directors are being forced to resign from their post.
The resignation of the banks is imposing a threat on the stability of the banking sector and the country’s economy as well, experts mentioned.
At such a time, the Managing Director (MD) of various banks is resigning one after another, creating a new discomfort in the banking sector.
SBAC Bank Managing Director (MD) Habibur Rahman resigned in protest against the unethical interference of defaulting directors in regular activities Last Thursday.
Not only Habibur Rahman, in the last 10 years of the bank's activities, four of the bank's five MDs were forced to resign before the completion of their term.
While a few prominent officials, such as MDs and CEOs, retire immediately after their tenure ends, the majority of others depart before the end of their fixed tenure.
The question now is whether they are voluntarily stepping down or being compelled to do so due to pressure.
Anis A Khan, former chairman of the Association of Bankers of Bangladesh (ABB) and former Managing Director and CEO of Mutual Trust Bank Ltd (MTB), said, "It's become a major concern. Senior qualified bankers, in particular, are in a state of panic right now. And that does not speak well for the industry's future. Yes, not all banks, but a few are suffering from a lack of corporate governance, which is the root of the problem."
He explained the reason for this by saying: "One of the main reasons for this is a lack of corporate governance in the banking sector. The interference of senior management in particular. Few boards of directors continue to have power over management in matters such as loan approval and other critical decisions. In that situation, it's become extremely difficult for a qualified and senior banker to endure."
"As a result, you will see an increase in non-performing loans (NPLs) on the one hand and an increase in capital inadequacy on the other," he added.
According to media reports, two prominent bankers recently resigned from Islami Bank Bangladesh Limited (IBBL) after the board of directors verbally pressured them to resign.
IBBL's DMD, Md Siddiqur Rahman, submitted his resignation. When, barely a week before his departure, another managing director, Md Omar Faruk Khan, resigned.
Previously, Shah Syed Abdul Bari resigned as National Bank managing director in November 2021, just seven months after being appointed.
According to media reports, Bari resigned from his position after being humiliated by one of the bank's board members that day.
Although in his resignation letter he cited health concerns as the reason for his resignation. What was also found is that a large number of bankers resigned before the end of their tenure.
Mohammad Abdul Mannan was allegedly compelled to retire from Islami Bank Bangladesh before the end of his term, as was Mohammed Nurul Amin from Meghna Bank and Tariqul Islam Chowdhury and Md Golam Faruque from South Bangla Agriculture and Commerce (SBAC) Bank.
Majority of them cited personal reasons or claimed health issues as the cause for their resignations.
Khondoker Rashed Maqsood, on the other hand, resigned from Standard Bank Ltd in January 2023 after completing his three-year contract as managing director and CEO.
Former governor of Bangladesh Bank Salehuddin Ahmed said, 'It is not right to let someone resign at will. Why you want to resign, whether there is pressure from any party - these explanations should be sought from the central bank. Otherwise, it sends a bad message to everyone including the depositors.
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