The managing directors (MDs) of commercial banks and financial institutions are dealing with higher stress levels due to rising defaulted loans and pressure to provide loans to unworthy companies.

Four MDs, of three banks and one financial institution, have resigned in recent times, unable to work under such pressure.

Economist Ahsan H Mansur told UNB that this situation hints that MDs are not able to work independently or follow the Bank Company Act.

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“When professionalism is prioritised and the bank is performing well, the MD of such a bank would never try to resign,” he said.

Dr Debapriya Bhattacharya of the Centre for Policy Dialogue, echoed Dr Mansur, saying that many MDs feel that no one can stop the influential persons from engaging in illegal practices.

He said this is a sign of a disaster in the banking sector. So the central bank has to wake up to save the financial sector.

The MDs of Bank Asia, South Bangla Agriculture and Commerce (SBAC) Bank, Padma Bank, and Aviva Finance resigned within a short time recently.

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Among them, the MDs of Padma Bank and SBAC Bank returned to their positions following the intervention of Bangladesh Bank, but the resigned MDs of Bank Asia and Aviva Finance did not return. The process of appointing new MDs has started in these two institutions.

Bank Asia MD Arif Billah Adil Chowdhury resigned on July 26. Padma Bank MD Tarek Riaz Khan stepped down in September. In the same month, South Bengal Agriculture and Commerce Bank (SBAC) Bank's MD Habibur Rahman also submitted his resignation letter. Abdul Jabbar, MD of Aviva Finance, a non-banking financial institution, was the last to resign.

The resignations triggered a fear of instability in the sector.

To prevent unrest, top officials of the central bank called the resigned MDs and, in some cases, the chairman and held urgent meetings with them. In these meetings, the MDs who resigned were urged to return to their duties.

The MDs were also assured that the central bank would protect them if the Board of Directors intervened in performing their duties. SBAC Bank MD Habibur Rahman returned to duty before the Central Bank started this process.

Padma Bank MD Tarek Riaz Khan returned to his old position on November 19. Meanwhile, Bank Asia MD Arif Billah Adil Chowdhury's resignation was not accepted. But he refused to return to work.

The process of replacing him with Meghna Bank MD Sohail RK Hussain has started, which is awaiting approval from the central bank.

The MD of Aviva Finance did not return to his duties despite the efforts of the central bank.