Trust Bank allowed to appoint multiple directors from sole sponsor

The Bangladesh Bank has allowed Trust Bank to appoint more than one director from its sole sponsor shareholder, the Army Welfare Trust, exempting the lender from a provision in banking law.

The central bank issued a notice in this regard recently, exempting the bank from complying with a provision of Section 23 of the Bank Companies Act, 1991, as amended in 2023.

The provision states that no institution or company may appoint more than one representative director to a bank’s board.

A senior Bangladesh Bank official said the provision was relaxed as Trust Bank has only one sponsor shareholder, while the number is generally higher at other banks.

The exemption allows the bank to appoint more than one director from the Army Welfare Trust, the official added.