Govt weighs private bankers for top posts at state-owned banks

The government is considering appointing senior executives from private commercial banks as managing directors of state-owned banks after several top posts recently became vacant.

The move follows a new Ministry of Finance policy that allows the government to choose candidates not only from serving and retired officials of state-owned banks but also from the private banking sector.

The Policy on Nomination, Appointment, Promotion and Posting of Managing Directors, Deputy Managing Directors and General Managers of State-owned Commercial Banks, Specialised Banks and Financial Institutions, 2026 was issued on 19 October.

The Financial Institutions Division is now preparing a list of possible candidates, which will be reviewed by a special committee headed by the finance minister.

The search for new managing directors comes after the government recently removed the heads of Sonali Bank, Janata Bank and Rupali Bank. It had earlier cancelled the remaining terms of the managing directors of BASIC Bank and Agrani Bank.

Speaking to Daily Waadaa, Md Azimuddin Biswas, additional secretary of the division’s Central and Commercial Bank Wing, said there was no restriction on appointing senior executives from private banks.

“The government can appoint from the existing pool of state-owned bank executives, retired bankers, or executives from private-sector banks,” he said.

After the committee selects the candidates, their names will be sent to Bangladesh Bank for regulatory approval.

The move would mark a major change from the usual practice.

In the past, managing directors of state-owned banks were generally chosen from senior officials already working in the public banking system.

Government officials believe bringing in experienced private-sector bankers could improve management and strengthen accountability at state-owned banks, many of which have struggled with weak governance, irregularities and high levels of bad loans.

The plan, however, has created concern among senior officials at state-owned banks. Many fear that appointing outsiders could reduce their chances of reaching the managing director’s post after spending years in the public banking system.

Some bankers also argue that changing the managing director alone may not solve the deeper problems facing state-owned banks.

They point to board influence, political pressure and weak accountability as major causes of poor lending decisions and governance failures.