Like banks, chief executives of non-bank financial institutions now cannot be removed or suspended without approval from Bangladesh Bank, a move which gives the central bank more power to fight irregularities.

The move comes after CEOs of NBFIs, in a meeting with the BB governor earlier this month, demanded more protection such that their employers could not remove them at will.

At the same meeting, they also argued that the safeguard is important for helping them work with integrity and fight irregularities effectively.

Conversely, the CEOs are now answerable to the central bank for any irregularity in their companies.  

Experts said the central bank instruction will provide more job security as the executives will not be obliged to carry out any unlawful instructions from the board to retain employment.

At the same time, it will make the CEOs more accountable, as, in case of any scam or irregularity, they will not be able to justify their actions by simply saying that they had to perform the wrongdoings under pressure from the board. 

If CEOs seek to leave voluntarily or cancel their agreements with the NBFI before the expiry of the tenure, they will have to serve notices to the boards at least one month prior to their departure, said the central bank notice yesterday.

The chief executives will have to spell out reasons for their decision in the notice, and also forward a copy to the central bank.

Conversely, if a board wants to terminate its agreement with the CEO or instruct him to resign before the expiry of the tenure, it will have to serve notice to the CEO one month before he is due to leave.

In the notice, the board will have to state reasons for the order, and forward a copy to the central bank.

If the post of a CEO falls vacant following any voluntary departure or the expiry of the tenure, the board can promote someone from within the organisation to the post of acting CEO for a maximum three months.

The NBFI will have to inform the central bank about the appointment and send a profile of the employee being promoted.

If the NBFI fails to appoint a CEO within the three months, BB will appoint an administrator to the institution to act as the CEO, and the institution will have to bear salaries and other perks for him or her. 

The central bank can remove any CEO in the interest of the company and the public.

Yesterday, the central bank also issued a notice on appointment of advisers and consultants on contractual basis. It said the advisers cannot be paid too high a remuneration. The duration of their tenure will be one year, and they can be reappointed.

A former director, CEO or other retired officials cannot be picked as advisers at least two years before their departure or retirement.

In case of consultants, the central bank said they can be appointed to help NBFIs carry out specialised activities in areas of tax, laws and cases, engineering and technical and ICT.

The NBFIs should avoid recruiting consultants for activities that its regular employees are capable of doing. The notice, however, will not be applicable to advisers and consultants already employed at different NBFIs.