Bangladesh: BB for ACC action against BASIC’s ex-board members

Dhaka, July 14, 2014 (New Age): Bangladesh Bank on Sunday said it will send the detailed inspection report on the BASIC Bank loan scam to Anti-Corruption Commission so that the corrupt board members of the state-owned bank could be charged for criminal offence. The BB asked the newly constituted board of BASIC Bank to take punitive measures against its officials who were involved with the loan scam in collaboration with the former bank chairman Sheikh Abdul Hye Bacchu and managing director Kazi Fakhrul Islam. The newly appointed BASIC Bank chairman Alauddin A Majid on Sunday met with BB governor Atiur Rahman while the central bank asked to take measures to restore good governance so that the clients would regain their confidence in the bank. After the meeting, the central bank arranged a press briefing over the latest situation of BASIC Bank when BB executive director SM Moniruzzaman said that the new board would have to bring credit discipline in the bank in the shortest possible time to regain good governance. ‘The central bank has no scope to take action under the criminal laws against the corrupt officials and board members, and hence it will send its detailed inspection report to the ACC. The ACC may detect the involvement of the board members with the scam if it (ACC) conducts an in-depth investigation, he said. The BB asked the bank chairman not to approve any loan proposal according to the wish of any single director, he said. According to the central bank report, BASIC Bank disbursed more than Tk 4,500 crore in loans in the last few years violating rules and regulations. The BB report unearthed that the recently dissolved BASIC Bank board along with its management were involved with the irregularities. The BB asked the new BASIC Bank chairman to step up its default loan recovery programme and the board would have to review the latest situation of the non-performing loans at its next meetings, he said. ‘The bank board will have to ensure transparency and responsibility. The board earlier did not streamline its audit. From now on, the board will have to oragnise the meetings in accordance with the central bank direction,’ he said. BB inspection team found that the Shantinagar, Dilkusha, Gulshan, Agrabad and Jubilee Road branches of the state-owned bank had perpetrated huge anomalies in recent years, he said. The central bank earlier gave directions to the bank to reestablish governance at the branches, but it (BASIC Bank) did not comply with the direction of the central bank, Moniruzzaman said. The BB asked the bank to collect the real situation of the branches through field survey which would help to recover the defaulted loans, he said. ‘The BB will not intervene into the human resource system of BASIC Bank. But the bank will have to take action against its unskilled and corrupt officials’, he said. The new BASIC Bank board will hold its first meeting today. The BB governor asked the BASIC Bank chairman to restrict the bank’s spending, he said. The central bank also asked BASIC Bank to appoint a managing director and chief executive officer in the quickest possible time so that the management of the bank can function smoothly and efficiently, he said. In June, the BB fired BASIC Bank managing director Kazi Faqurul Islam for his involvement in the loan scam. The government also dissolved the board of directors of the BASIC Bank after the resignation of its controversial chairman Sheikh Abdul Hai Bachchu and replaced him with Alauddin A Majid.