Should age decide who runs a bank?

Bangladesh Bank has recently tightened its rules for appointing Managing Directors and Chief Executive Officers (MD/CEOs) of banks. Among the new requirements, one stands out: a minimum age of 45 years. While well-intentioned, this restriction raises serious questions. Is age really the best proxy for capability? Or does it risk excluding a generation of dynamic, tech-savvy leaders at precisely the time when the sector needs them most?

GLOBAL PRACTICES: NO SUCH LOWER AGE BAR: Internationally, most regulators do not impose a minimum age bar for bank MD/CEOs. Instead, they rely on “fit and proper” assessments that measure integrity, expertise, competence, and independence.

• India: The Companies Act allows MD appointments from the age of 21. The Reserve Bank of India (RBI) has capped the maximum age at 70 but no lower age.
• United Kingdom & Eurozone: No minimum age; regulators like the PRA, FCA, and ECB emphasis “fit and proper” suitability, not age.
• United States: No statutory age requirement; the OCC, Federal Reserve, and FDIC focus on capability, track record, and governance.
• Singapore & Malaysia: No minimum age; regulators like MAS and BNM assess competence and governance.
• Australia: The Australian Prudential Regulation Authority (APRA) sets no age limits; appointments must simply pass a “fit and proper” test.
• Canada: The Office of the Superintendent of Financial Institutions (OSFI) has no minimum or maximum age bar, focusing only on fitness and integrity.
• Japan: The Financial Services Agency (FSA) applies suitability and capability tests, but no fixed age requirement for bank CEOs.
• France: No regulatory minimum; BNP Paribas recently amended its by-laws to raise the CEO age cap to 68, showing age is left to shareholders, not regulators.
• UAE & Qatar: Regulators require CEOs to be fit and proper, but again, no specific minimum age.

Bangladesh’s insistence on 45–65 years is therefore unusual by international standards. It risks shrinking an already thin talent pipeline and may exclude younger, digitally fluent leaders who could strengthen governance, reduce NPLs, and drive innovation.

COUNTRIES WITH MINIMUM AGE BARS: While most countries avoid fixing a lower age, a few jurisdictions have experimented with it. Pakistan is one example, where the State Bank requires bank CEOs to be at least 40 years old under its Fit and Proper Test. Bangladesh now mandates a minimum of 45 years under the Banking Companies Act and Bangladesh Bank circulars. Outside South Asia, very few regulators set explicit lower thresholds. Instead, age restrictions are usually linked to general company law (for example, 21 years in India’s Companies Act for directors and MDs, 18 years in Singapore and Malaysia, and 16 years in the UK). These are not banking-specific rules but broad corporate governance standards. Thus, Bangladesh and Pakistan stand out as rare cases where a sector regulator imposes a defined minimum age bar on bank MD/CEOs.

WHY YOUNGER LEADERS CAN DELIVER: Banking is no longer only about credit disbursement and relationship management. The 21st-century MD must be a tech-savvy strategist who can embrace AI, manage cyber risks, mobilise low-cost deposits, and cut non-performing loans (NPLs) with data-driven discipline.

A capable leader in their late 30s or early 40s could easily tick these boxes:

• Energy & Stamina: To cope with relentless regulatory and market pressure.
• Digital Fluency: A comfort with fintech, blockchain, AI-driven risk management, and customer-centric apps.
• Risk Appetite & Agility: Willingness to experiment with new business models without compromising prudence.
• NPL Reduction Expertise: Focus on analytics, real-time monitoring, and stronger recovery strategies.

BANGLADESH’S LEADERSHIP DROUGHT: The reality is stark. Quality MDs are scarce. The same names rotate across banks, while younger Deputy MDs and EVPs, despite strong credentials, are locked out by the age bar. This creates three risks:

1. Recycling of the same leadership pool with little innovation.
2. Discouragement of ambitious talent who see a regulatory wall ahead.
3. Weak succession planning, since grooming leaders earlier becomes pointless if they cannot ascend before 45.

The result: slow reforms, delayed digital transformation, and persistent asset-quality problems.

A BETTER FORMULA: FIT & PROPER, NOT AGE:

Bangladesh Bank is right to demand competence and credibility. But these should be tested through robust fit-and-proper criteria, not age thresholds. An alternative approach could be:

• Scrap the 45-year floor; retain the 65-year ceiling to ensure orderly succession.
• Strengthen fitness standards: require track records in NPL reduction, digital transformation, and portfolio quality.
• Encourage succession pipelines, grooming younger leaders through rotational leadership across credit, corporate, trade, treasury, operations, SME, and technology.
• Mandate performance-linked reappointments, tying tenure to measurable improvements in NPL ratios, profitability, and customer service metrics.

Banking is an industry where wisdom and prudence matter, but so do innovation and stamina. Bangladesh cannot afford to shut out its next generation of capable leaders by enforcing an arbitrary minimum age of 45.

The true test of an MD/CEO should not be the year of birth—but the ability to lead from the front, embrace technology, manage risk, and build quality portfolios. If we want a stronger banking sector, we must let talent, not age, decide who wears the crown.

Dr. Md Ariful Islam is a banker and economic researcher. islammdar@gmail.com. Dr. Syed Md Aminul Karim is a former Member of the National Board of Revenue (NBR). syedmakarim@gmail.com