Bank Merger Policy: MDs and DMDs to lose their jobs
In a significant move towards banking consolidation in the country, four banks under state ownership have taken the forefront. Following the initiation of the amalgamation process with Exim Bank, the government banks have decided to merge into two entities. However, deliberations are ongoing regarding the fate of employees from the two merging banks.Bangladesh Bank issued new policy guidelines on Thursday concerning banking consolidation. The guidelines stipulate that employees of banks slated for liquidation cannot be laid off before three years have elapsed. Nevertheless, senior officials of these banks will not be eligible for positions in the merged entity.According to the central bank's policy, executives who hold transferable posts in acquiring banks/financial institutions will not be appointed as directors in the management councils of the acquiring banks/companies. However, after five years, shareholders of acquiring banks may include such executives in the management councils based on their qualifications and suitability.Furthermore, during the consolidation period, executives who were directors previously will have to maintain their loans regularly within a stipulated period of five years. Hence, they must adhere to regular loan repayment without restructuring or rescheduling.The guidelines also specify that management positions such as Managing Directors, Additional Managing Directors, and Deputy Managing Directors of liquidated banks/companies cannot be retained in the acquiring government banks/companies. If the acquiring bank/financial institution is under government ownership, the government reserves the right to deploy these management executives in other banks/financial institutions.Regarding employees, the policy delineates that employees of acquiring banks/companies or financial institutions cannot be terminated before the completion of three years from the initiation of the merger process. However, after three years, the acquiring bank/company can reassess the competency of these employees and make appropriate decisions.
