Non-Bank Financial Institutions (NBFIs) must now meet minimum qualification, experience and suitability standards when appointing chief financial officers, chief information technology officers and company secretaries, under a Bangladesh Bank (BB) circular issued on Thursday and effective immediately.
The three positions must be full-time. No one can be engaged part-time. An acting official cannot hold a post for more than three months, after which a qualified candidate must be appointed.
Experience requirements for a CFO vary by portfolio size. Where outstanding loans and investments exceed Tk1,000 crore, a CFO needs at least 10 years in a bank or finance company, including at least three years in accounting and taxation.
Where the portfolio is Tk1,000 crore or less, the minimum is eight years, including at least three years in accounting and taxation. Candidates must hold an MBA in finance or accounting, an MBA in Banking Management, or a postgraduate degree in finance, accounting or banking. Preference must go to those with CA, CMA, CFA or equivalent qualifications, and to expertise in accounting, financial reporting, tax, provisioning, financial control, regulatory reporting, liquidity and capital management, and IFRS compliance.
A CITO needs at least eight years in information technology, including a minimum of five in a bank or finance company. Practical experience must cover IT policy and planning, financial networks and applications, financial information systems, cybersecurity, payment technology, IT and data governance, business continuity, and cloud computing and risk management. Academic requirements are a bachelor’s degree in computer science or engineering, physics, applied physics, mathematics, statistics or EEE, or a postgraduate degree in IT/ICT or computer science with a PGD in ICT. The official must be a member or associate member of an approved or registered computer society.
A Company secretary must have at least eight years in a bank or finance company, including a minimum of four in board secretariat or compliance. Alternatively, three years as a company secretary or equivalent at a listed company is acceptable. Candidates must hold a Chartered Secretary qualification recognised by the ICSB and at least a bachelor’s degree in any discipline.
All three must meet common fit-and-proper criteria. They must not have been convicted by a criminal court, penalised for violating laws or regulations, dismissed or conditionally released for embezzlement, corruption, forgery or moral misconduct, or involved in illegal activities while in the banking or finance sector. They must not be loan defaulters, must never have been declared bankrupt, must have no business interest in the company concerned, and cannot hold a directorship or other position in another business organisation.
Finance companies do not need prior Bangladesh Bank approval to make these appointments, but must ensure candidates meet the requirements in letter and in substance, and must disclose the appointments in their annual reports. They must also comply with paragraph 2(5) of DFIM Circular No. 06 of 13 June 2023 on appointment and release of these officials.
Boards, or chief executives where applicable, will determine the responsibilities and powers of the three officials, taking into account the Basel Committee’s Corporate Governance Principles for Banks of July 2015 and BSEC’s Corporate Governance Code of June 2018.
Officials already serving as CFOs, CITOs and company secretaries have until 31 December 2029 to meet the educational and experience requirements. The circular was issued by the Finance Company Regulation and Policy Department under Section 41 of the Finance Company Act 2023.
Bangladesh Bank said the standards respond to new business, legal and technological risks arising from new financial products, regulatory compliance requirements and IT modernisation, and that skilled, experienced professionals are needed for better governance.
