Kazi Zahidul Hasan :
Banking sector experts on Sunday held the board of directors of Farmers and NRBC Banks responsible for corruption and irregularities in administering the banks.
They urged the authorities to bring the members of the board to book for saving the banks as well as restoring discipline in the country’s banking sector.
“The board of directors is the decision making body of a bank. It’s also responsible for convening shareholders’ meeting, deciding the bank’s strategic policy, business and investment plans and approve loans. So, directors of Farmers and NRBC Banks must shoulder responsibility over loan scams and corruption,” Dr Salehuddin Ahmed, former Bangladesh Bank (BB) governor, told The New Nation yesterday.
He said the country’s banking sector is passing through a critical time heeling wounds from loan scandals, corruption and bad corporate governance. “Unfortunately, exemplary and drastic punishment could not be meted out to the culprits whose guilt was proven. This creates a culture of ‘impunity’ encouraging many to loot public money,” he added.
Dr Salehuddin Ahmed also said that the board of directors should be made accountable in banking scams. The role of the central bank is crucial in this regard.
“Appointing observer is not enough to salvage a bank sinking with financial irregularities and bad governance. BB should go tough on the banks by dissolving their boards. If bank directors are found involved in loan irregularities, drastic action should also be taken against them,” he added.
He further said that this action could be taken for the Farmers Bank and NRBC Bank. It is necessary to restore discipline in the banking sector as well as confidence of the depositors.
“As I learnt, the financial condition of Farmers Bank and NRBC Bank deteriorated drastically as a result of aggressive lending practices and large loan scandals. They are now near to bankruptcy due to their asset liability mismatch,” Dr Khondoker Ibrahim Khaled, a former BB deputy governor, told The New Nation.
“The board of directors could not avoid their responsibility for the banks current financial state. They must take the responsibility,” he added. Dr Ibrahim Khaled mentioned that these two banks secured license under the political consideration. Having connection with government high-ups, the sponsors of the banks are ignoring BB directives in administering the banks. “They have also provided shady loans to a vested quarter to serve their personal agenda,” he added.
Ibrahim Khaled said that the errant directors should be held responsible in this regard and the government and the BB should take action against them.
