A managing director (MD) of a bank cannot become a consultant and advisor to that bank until five years after retirement. Bangladesh Bank has made this provision in 2021 to restore good governance in the banking sector. Bangladesh Bank has approved the appointment of recently retired MD of the private sector IFIC Bank as an advisor to the bank in violation of the provisions made by themselves. On May 11, Governor Abdur Rauf Talukder approved the appointment ‘on special consideration’.

According to IFIC Bank sources, the tenure of the bank’s MD Shah Alam Sarwar ends on May 13. He then joined the bank as a ‘strategic advisor’ from May 26. He also shared this information on social media. He continues to perform this duty sitting in the same room as before. The bank is yet to appoint a full-time MD after his tenure.

IFIC Bank sought special approval to appoint retired MD as advisor. Bangladesh Bank has the power to grant such approval on special grounds outside the rules. That has been done
Majbaul Haque, Spokesperson, Bangladesh Bank

According to Bangladesh Bank sources, he has been appointed as a ‘strategic advisor’ for two years. For this, a monthly salary of around 15 lakhs has been approved.

In a notification issued by the central bank in 2021, it is said that officers up to the MD or the next two positions of a bank cannot become advisors or consultants in the respective banks until they have completed five years of retirement. Before making this provision, there was an opportunity to become an advisor or observer in the concerned bank only after one year of retirement.

According to sources related to Bangladesh Bank, last January National Bank applied for the appointment of its retired MD Mehmud Hossain as an advisor to the same bank. But Bangladesh Bank did not approve that application. As a result, Mehmud Hossain’s employment in the bank was stopped until he completed five years of retirement.

When asked, Bangladesh Bank spokesperson Mejbaul Haque told media that IFIC Bank has taken the initiative to reform itself. For this, special approval was sought to appoint the retired MD as advisor. Bangladesh Bank has the power to grant such approval on special grounds outside the rules. That has been done.

When asked whether this special consideration will be applied to others too, Majbaul Haque said, Bangladesh Bank will consider it if someone requests an approval for special needs. Earlier in the case of National Bank, the MD of that bank was not appointed as an advisor as the application was not reasonable.

It is known that Shah Alam Sarwar was the MD of IFIC Bank from December 2012 to May 13. Shah Alam Sarwar, who has worked in various banks at home and abroad, started working in the top position as MD of IPDC Finance in 2005. After that he served as MD of United Commercial Bank, Premier Bank and Trust Bank respectively. Besides, he was also the director of Grameen Bank as a government nominated representative from 2011-20.

On the condition of anonymity, three MDs of three banks told media that Bangladesh Bank is talking about restoring good governance on the one hand, but on the other hand it is breaking the rules. This way the banking sector will never be fixed.