The government will no longer directly appoint the managing directors (MDs) or chief executive officers (CEOs) of Bangladesh’s six state-owned commercial banks, including Sonali Bank and Janata Bank, under a newly introduced policy aimed at strengthening governance and transparency in the banking sector.

Instead, the government will nominate candidates, while the respective banks’ boards of directors will make the final appointments, subject to obtaining a no-objection certificate (NOC) from Bangladesh Bank.

The new framework is part of 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,” issued by the Financial Institutions Division (FID) of the Ministry of Finance on July 26.

However, the government will continue to directly appoint the managing directors of six specialised banks, including Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank (RAKUB), as well as Bangladesh House Building Finance Corporation (BHBFC) and Investment Corporation of Bangladesh (ICB).

The government will also retain authority over the promotion, posting and transfer of deputy managing directors (DMDs) and general managers (GMs) at state-owned commercial banks, specialised banks and financial institutions.

The new policy replaces all previous guidelines, including the one issued on January 18 this year, marking the third revision in the past three years.

Officials at the Financial Institutions Division said the revised policy is designed to establish a more structured and transparent system for appointments and promotions, with greater emphasis on qualifications, experience, professional competence and accountability.

FID Secretary Nazma Mobarek said the government had effectively been nominating MDs even under the previous policy, although the guideline used the term “appointment.” The new policy corrects that inconsistency by clearly defining the government’s role as nomination rather than direct appointment.

She also said that, as part of ongoing deregulation efforts, only files related to MD appointments will now require approval from the Prime Minister’s Office, while approvals for DMD and GM appointments will be handled by the finance minister.

Eligibility criteria

Candidates for the MD position at state-owned commercial banks must hold a postgraduate degree, with preference given to those with advanced qualifications in economics, accounting, finance, banking, management or business administration.

Applicants must not have obtained a third division or equivalent in any stage of their academic career. Eligible candidates must be between 45 and 65 years of age, and successful applicants will receive a three-year contractual appointment.

The policy also sets minimum educational qualifications, experience and professional competency requirements for promotions to DMD and GM positions.

Officials with records of serious disciplinary violations, financial irregularities, corruption or ethical misconduct may be disqualified from promotion. Knowledge and training in anti-money laundering and counter-terrorism financing, information technology skills, banking laws and risk management experience will also be considered.

Performance-based evaluation

The policy introduces a 100-point evaluation system for promotions, allocating the highest weight—40 marks—to the Annual Confidential Report (ACR).

The remaining marks are distributed as follows:

• Educational qualifications: 15
• Professional experience: 15
• Service record: 10
• Banking professional examinations: 5
• Interview: 10
• Annual Confidential Report (ACR): 40

Beyond academic qualifications, the assessment will also consider leadership, decision-making ability, problem-solving skills, human resource management, business expansion, profitability, loan recovery, deposit mobilisation, risk control and contributions to corporate governance.

Experience in corporate banking, audit, risk management, credit administration, foreign trade and information technology will also carry significant weight.

Pending investigations into serious misconduct, court cases, regulatory sanctions, major inspection findings by Bangladesh Bank or violations of anti-money laundering regulations may negatively affect promotion prospects.

Selection committees

The policy provides for the formation of a seven-member committee, headed by the finance minister, to recommend MD candidates. A separate committee led by the Bangladesh Bank governor will oversee promotions to DMD and GM positions.

These committees will review applications, verify credentials, conduct interviews and assign evaluation scores before forwarding recommendations to the respective bank boards or authorities for final approval.

The policy also requires every stage of the evaluation process to be documented to ensure transparency and facilitate future review if necessary.