In a major regulatory shift aimed at restoring governance and financial discipline, Bangladesh Bank (BB) has introduced a comprehensive 100-mark evaluation framework to assess the performance of Managing Directors (MDs) and Chief Executive Officers (CEOs) in all scheduled banks.

Under the newly issued "Key Performance Indicators (KPIs) Framework," issued on Sunday by the Banking Regulation and Policy Department (BRPD), the performance of bank MDs will now be judged across five crucial categories totaling 100 marks.

The 100-Mark Evaluation Breakdown:

Bank Solvency and Liquidity Lens (25 Marks): Evaluates capital strength, including Capital to Risk-Weighted Assets Ratio (CRAR), Common Equity Tier 1 (CET1), and liquidity shock buffers.

Asset Quality Lens (25 Marks): Focuses heavily on reducing non-performing loans (NPLs), managing stressed assets, and recovering defaulted or written-off loans.

Governance and Internal Control Lens (25 Marks): Assesses compliance with central bank directives, AML/CFT compliance, supervisory risk ratings, and ICT security.

Inclusion, Customer & Market Conduct Lens (15 Marks): Measures progress in financial inclusion, digital banking adoption, customer dispute resolutions, and CMSME/green financing.

Profitability Lens (10 Marks): Evaluates Return on Assets (ROA), Return on Equity (ROE), net interest margins, and operational cost efficiency.

An overall score of 75 or above will be rated ‘Above Average’, 65 to below 75 ‘Average’, while scores below 65 will be rated ‘Below Average’ and will require immediate improvement.

The Board of Directors of each bank will set targets and compute the score, whilst Bangladesh Bank will approve the targets and review the outcome.

The central bank made it clear that MDs failing to achieve at least 50 percent of targets in critical sub-indicators—such as gross NPLs, defaulted loan recoveries, and credit outreach—will face severe penalty deductions from their overall final score.

If performance falls below 50 percent on a specific KPI, zero marks will be awarded for that component.

Banks’ Boards of Directors must set 3-year rolling targets based on these indicators and submit annual and semi-annual review reports to Bangladesh Bank.

The final evaluation score will directly dictate the tenure extension, reappointment, and compensation packages of bank MDs.