Banks face tighter control as law being amended

The government on Monday approved the proposal of the Bank Company (Amendment) Bill-2013 in principle to strengthen the country’s banking system.The approval came from a meeting of the cabinet held at Secretariat in the city with the Prime Minister Sheikh Hasina in the chair.
After the meeting, Cabinet Secretary M Mosharraf Hossain Bhuiyan made the disclosure while talking to journalists.
He said, “The existing law was amended in 2003 and during the last 10 years there has been various changes in banking sector nationally and internationally, especially in the cross border banking supervision.”
The cabinet gave approval to the draft law to incorporate these changes, he said, adding that the government out of its commitment to make the law time befitting has decided for the amendment.
Under the new law, he said, there are proposed measures to monitor the activities of these organisations and take punitive measures against them if any irregularity is detected.
Besides, under the definition and scope of loan defaulter has been clarified and widened in the law.
As per the new proposed law, a director of the bank can serve as director for maximum two successive terms of three years.
A director could serve further after a gap of minimum one term while same person could not be director of more than one financial institution, the amendment also mentioned.
The draft law kept a provision of maximum Taka 20 lakh fine for investing more than 10 percent of the paid up capital in the share markets by the banking companies.
In case of the continuation of violation of this stipulation another Taka 50 thousand would be fined per day from the second day of the violation, the law proposed.
Cabinet members, advisers of the Prime Minister and state ministers of various ministries and secretaries concerned were also present at the meeting.

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