The act approved last week also aimed to bring an end to malpractice by bank directors, but it faced stiff resistance from the bank owners who found its newly inserted clauses 'unacceptable' and are trying to get them dropped, sources said.

Politically backed trade union activists however did not need to put in much effort to resist the latest move. The government dropped the clauses carrying stringent measures against them during the amendment, the sources added.

One of the proposals that was dropped was the first sub-clause of Clause 57 of the act that said trade union leaders will not be allowed to use bank cars and telephones for running trade union affairs. Another one stipulated a maximum three years' jail term with Tk 1 lakh penalty if a trade union activist was found guilty of physically harassing a bank official. Besides, the guilty would have to pay Tk 500 each day for defaulting on the penalty payment.

"But the cabinet meeting did not approve these two amendments in the face of opposition from some cabinet members," said a source in the cabinet, adding "It is clear that moneyed bank owners exert less power than a handful of unruly politically backed union leaders do."

Bankers, the owners apart, initially welcomed the amendment, but now it is drawing criticism.

A high official of a nationalised commercial bank said, "We have been asked to cut costs. But trade union leaders use bank cars for personal purpose. They also take cars from government pools whenever they want. And the banks pay for their fuel cost."

"They also use telephones for meeting personal ends. They make long-distance calls and the banks bear the cost," added the official, who preferred to remain unnamed.

"CBA (collective bargaining agent) leaders also impose themselves on the bank officials on administrative issues. And there are instances where they force officials into granting loans to clients. When officials refuse to act accordingly, they sometimes get transferred, but become obvious target of harassment and verbal abuse," the official noted.

"We cannot take action against them since political parties harbour them."

"[The dropping of the proposals] is a signal that the government will not be able to make much progress in its banking reforms now," observes another banker.

The Bangladesh Association of Banks (Bab), meanwhile, is lobbying hard for dropping of the clauses on the directors' tenure, terms and number. At a discussion of Bab on Sunday, ruling BNP lawmaker and Director of United Commercial Bank Limited MA Hashem suggested talking with the prime minister.

Hashem said he met Law Minister Moudud Ahmed who told him there was nothing much to do. He however quoted Moudud as saying that the matter remains 'open' and bank owners 'may try to reach their objectives'.

Bab Chairman Syed Manjur Elahi told the meeting, "We have tried through the prime minister's principal and political secretaries but to no effect."