BANGLADESH Bank (BB) received the resignation letters of outgoing Social Islami Bank Ltd. chairman Md Rezaul Haque, executive committee chairman Md Anisul Hoque and managing director Shahid Hossain that they submitted after the a board meeting at the Westin Dhaka hotel amid tight security, as per reports of a local daily.
Soon after the meeting on Monday, the bank gave BB the credentials of the newly appointed chairman, executive committee chairman and the managing director. The BB’s role ultimately helped the Chittagong-based S Alam Group to strengthen its grip on the bank, as per the report. The Group recently purchased around 50 percent stake in the SIBL through 19 companies.
However central bank spokesperson Subhankar Saha commented that the country’s banks operate as companies. They make changes in their boards in line with the Company Act, and this issue does not fall under the jurisdiction of the BB. He, however, said one has to take approval from the central bank for holding the post of directors. The BB gives NOC to a person if he or she is not a defaulter with any financial institution.
The central bank hurriedly accepted the resignation letters and provided no-objection certificates (NOC) to the three appointees. The BB also went against its own policy as it accepted the resignation letter of the outing MD of SIBL Shahid without a one-month notice from him. According to a BB circular issued on December 23, 2014, if the chief executive officer of a bank wants to end his or her contract before expiry or resign voluntarily, he or she will have to give a notice to the board at least one-month before, and also explain the reasons behind resignation. At the same time, the CEO of the bank will have to forward a copy of the notice to the BB. But this didn’t happen in the case of Shahid.
The BB accepted his resignation only hours after he submitted the papers. The central bank was also supposed to verify the reasons for his resignation, but it didn’t, said the BB officials. The central bank also quickly approved the appointment of Quazi Osman Ali as the new MD of the SIBL and also gave him NOC.
Earlier on January 5, Islami Bank Bangladesh Ltd saw several major shifts in policy and operations that some insiders claim were rife with irregularities and benefited interests of parties gaining control of the bank. The chairman, vice-chairman and managing director of IBBL all abruptly resigned – in almost a parallel case.
Following the change, a number of foreign investors sold off their shares in IBBL, which were allegedly bought by S Alam Group.
Meanwhile IBBL’s profits fell by 52 percent and its defaulted loans rose by almost 1300 crore. If a similar situation now develops at SIBL then there is something to worry about. Either way, giving a private organisation power over two different banks is no way to ensure efficiency and mismanagement of impunity for big corruption.
The Anti-Corruption Commission is not being effective in creating fear against big corruption of big people. We are proving to be a nation not responsible or honest enough for fighting corruption in banking or any other public sector. We want to see big ones in the corruption network of the banking or any other public sector do not go unpunished.
