Kazi Zahidul Hasan :
The Parliamentary Standing Committee on Finance Ministry has brought the irregularities and corruption in administering the Farmer’s Bank and NRB Commercial (NRBC) Bank under its scrutiny amid strident calls from various quarters.
Bangladesh Bank (BB) earlier detected a string of loan scandal in the banks and it thereby hogged media headlines.
“We came to know that both the banks are now grappling with a high-level of operational inefficiency and corruption. Besides, BB has also unearthed series of loan scandals in the banks forcing the Committee to bring their affairs under its scrutiny,” a member of the Parliamentary Watchdog told The New Nation yesterday.
He said the affairs of the banks will get prominence in the next meeting of the Committee to be held on Sunday. BB has been asked to place a full report before the Committee on both the banks.
“Discussion will also be held on Islami Bank Bangladesh Limited, Bank Company Act and other related issues,” he added.
When asked, he said, “We will assess their report and later call the banks’ high-ups for grilling.”
The defaulted loan at Farmer’s Bank soared to Tk 306 crore as on June this year thanks to poor corporate governance and loan irregularities
The bank had Tk 171 crore by the end of December 2016, according to BB.
BB officials said the main causes of the bank’s rising defaulted loans include laxity in credit monitoring, poor appraisal system and lack of effective credit management policy to govern the disbursement of funds to borrowers.
BB earlier found Tk 400 crore loan irregularities in the bank in a special inspection conducted after reports of misappropriation of funds by a vested group.
The amount was disbursed in violation of the banking rules and regulations.
Three BB investigation teams detected the irregularities in the bank’s Gulshan, Motijheel and Shyampur branches between September and November of 2015.
The amount was sanctioned to various entities, many of them associated with insiders, without proper security or collateral, putting the depositors at risk.
The central bank expressed concern regarding recoverability of the amount, according to the investigation report.
BB probe found that the bank’s Executive Committee Chairman Mahabubul Haque Chisty, Managing Director Choudhury Moshtaq Ahmed, Additional Managing Director AKM Shameem and six other officials were responsible for the anomalies.
Following detection of loan irregularities, BB appointed its General Manager ANM Abul Quasem as observer at the Farmers Bank.
The Farmer’s Bank Limited is a fourth generation bank commenced its banking operation on June 3, 2013 taking advantage of the incumbent government’s partisan consideration.
“A haphazard situation was prevailing in the bank over its lending activity. I had supervised overall activities of the bank and tried to restore discipline in their lending activities and strengthen good governance,” ANM Abul Quasem told The New Nation yesterday.
He said all the performance indicators of the bank were poor when I was appointed there as an observer. I ensured better monitoring and supervision and tried to improve financial health of the bank.
“The problem remained in the bank is inexperience, not corruption. Improper risk management and laxity over monitoring have turned a big amount of loan into sour,” he added.
“As I know, the management of the bank was trying hard to recover and regularize the loans which was disbursed through irregularities,” noted Quasem who was recently posted to BB’s Khulna office. The NRBC Bank commenced its Banking operation on April 2, 2013.
After commencing operation, the bank came into spotlight due to internal feud, corruption and loan scandals.
BB also found Tk 701 crore in loan scam at the bank during inspecting its various branches in between June, 2016 and December 2016.
The loan was sanctioned forging signatures of the directors who did not attend Bank’s board meetings held during 2013-2016.
They were out of the country during that period.
The Directors are Kamrun Nahar Sakhi, ABM Abdul Mannan, Firoz Haider Khan and Md Amir Hossain. They had been shown present in the Board meetings by forging signatures.
The BB has appointed an observer in the NRBC Bank.
The Parliamentary Standing Committee on Finance Ministry has brought the irregularities and corruption in administering the Farmer’s Bank and NRB Commercial (NRBC) Bank under its scrutiny amid strident calls from various quarters.
Bangladesh Bank (BB) earlier detected a string of loan scandal in the banks and it thereby hogged media headlines.
“We came to know that both the banks are now grappling with a high-level of operational inefficiency and corruption. Besides, BB has also unearthed series of loan scandals in the banks forcing the Committee to bring their affairs under its scrutiny,” a member of the Parliamentary Watchdog told The New Nation yesterday.
He said the affairs of the banks will get prominence in the next meeting of the Committee to be held on Sunday. BB has been asked to place a full report before the Committee on both the banks.
“Discussion will also be held on Islami Bank Bangladesh Limited, Bank Company Act and other related issues,” he added.
When asked, he said, “We will assess their report and later call the banks’ high-ups for grilling.”
The defaulted loan at Farmer’s Bank soared to Tk 306 crore as on June this year thanks to poor corporate governance and loan irregularities
The bank had Tk 171 crore by the end of December 2016, according to BB.
BB officials said the main causes of the bank’s rising defaulted loans include laxity in credit monitoring, poor appraisal system and lack of effective credit management policy to govern the disbursement of funds to borrowers.
BB earlier found Tk 400 crore loan irregularities in the bank in a special inspection conducted after reports of misappropriation of funds by a vested group.
The amount was disbursed in violation of the banking rules and regulations.
Three BB investigation teams detected the irregularities in the bank’s Gulshan, Motijheel and Shyampur branches between September and November of 2015.
The amount was sanctioned to various entities, many of them associated with insiders, without proper security or collateral, putting the depositors at risk.
The central bank expressed concern regarding recoverability of the amount, according to the investigation report.
BB probe found that the bank’s Executive Committee Chairman Mahabubul Haque Chisty, Managing Director Choudhury Moshtaq Ahmed, Additional Managing Director AKM Shameem and six other officials were responsible for the anomalies.
Following detection of loan irregularities, BB appointed its General Manager ANM Abul Quasem as observer at the Farmers Bank.
The Farmer’s Bank Limited is a fourth generation bank commenced its banking operation on June 3, 2013 taking advantage of the incumbent government’s partisan consideration.
“A haphazard situation was prevailing in the bank over its lending activity. I had supervised overall activities of the bank and tried to restore discipline in their lending activities and strengthen good governance,” ANM Abul Quasem told The New Nation yesterday.
He said all the performance indicators of the bank were poor when I was appointed there as an observer. I ensured better monitoring and supervision and tried to improve financial health of the bank.
“The problem remained in the bank is inexperience, not corruption. Improper risk management and laxity over monitoring have turned a big amount of loan into sour,” he added.
“As I know, the management of the bank was trying hard to recover and regularize the loans which was disbursed through irregularities,” noted Quasem who was recently posted to BB’s Khulna office. The NRBC Bank commenced its Banking operation on April 2, 2013.
After commencing operation, the bank came into spotlight due to internal feud, corruption and loan scandals.
BB also found Tk 701 crore in loan scam at the bank during inspecting its various branches in between June, 2016 and December 2016.
The loan was sanctioned forging signatures of the directors who did not attend Bank’s board meetings held during 2013-2016.
They were out of the country during that period.
The Directors are Kamrun Nahar Sakhi, ABM Abdul Mannan, Firoz Haider Khan and Md Amir Hossain. They had been shown present in the Board meetings by forging signatures.
The BB has appointed an observer in the NRBC Bank.
