No liability of independent directors for finance company’s default: BB

Bangladesh Bank (BB) said that independent directors will not be held responsible for loans taken by a finance company.

“Independent directors will not be considered defaulters if the finance company defaults in compliance with Section 16(5) of the Finance Company Act 2023,” said a BB circular issued.

 Under the existing rules, independent directors, though separate from the shareholding of a finance company, were deemed defaulters when the company defaulted.

 As a result, many skilled individuals with clean records were reluctant to serve as independent directors at finance companies.