The association leaders at a press conference in Dhaka on Wednesday said implementation of the Bangladesh Bank circular no 8 and 12 issued on April 26 last would adversely affect the growth of private banks in Bangladesh.

According to the circular no 8, the tenure of the private banks' sponsor directors would be maximum six years at a stretch, in two terms. The other circular restricted the number of directors at 13 in the board of each bank.

BAB leaders termed both the circulars 'illogical' and said the orders would create a 'culture of selection' in the boards of directors of the banks.

The central bank issued the circulars following the passage of the Bank Company (Amendment) Act 2003 on March 9 this year. The BAB leaders said the circulars were even "more stringent" than the law.

They said there was no mention in the law that it will have retrospective effect. But the circular said the directors who had already completed six years in any bank would not retain their position after the next annual general meeting.

Speaking at the press conference, BAB Chairman Syed Manzur Elahi said a law should not be implemented with retrospective effect. "The act should be effective from the date of its amendment," he added.

The BAB leaders observed that any new restriction should be applicable only to the new banks, which will operate in future. The banks already in operation should not come under the restriction.

About the restriction on the number of directors they expressed doubt if the interest of the depositors could be protected by it.

The BAB leaders said such provisions are discriminatory as those are applicable only to the private commercial banks, not to the nationalised commercial banks or the foreign banks operating in Bangladesh.

BAB vice-chairman Manzurul Islam also attended the press conference.