Bangladesh: Scandal-hit BASIC Bank chairman quits

Dhaka, July 6, 2013 (New Age): Bangladesh Small Industries and Commerce Bank Limited chairman Sheikh Abdul Hai Bacchu has quit amid growing allegations that he misappropriated funds by approving shady loans of several thousands crore takas. The controversial chairman of the state-owned bank handed his resignation to the finance minister AMA Muhith Friday afternoon at the latter’s residence, two months before expiry of his tenure. Muhith, while talking to reporters Saturday at the secretariat, acknowledged that Hai, who was appointed chairman in 2009, was rewarded reappointment in 2012. The finance minister did not disclose the reason cited by Hai in his resignation, which, according to even many government officials, was long overdue given the unprecedented nature of the loan scam that has left the bank ailing. Bangladesh Bank detected anomalies worth more than Tk 4,500 crore and urged the finance ministry to dissolve the BASIC Bank board of directors, a couple of months ago. The finance ministry had been dillydallying on taking a firm decision on the loan scam in the BASIC Bank – a specialised bank once touted as one of the best-run public sector banks – first detected in November 2012. Muhith said Hai will be brought to book if found guilty. He also said they will reconstitute the board of directors of the bank and appoint a new a chairman. He said a notification in this connection may be issued on Sunday. Finance ministry officials said four bankers, including current Krishi bank chairman Alauddin A Majid, and a bureaucrat, are under consideration for the position of the new chairman, who will face the daunting challenge to lift the bank from its abysmal state. The default loans of BASIC Bank soared to Tk 2,557 crore last March from Tk 1,417 crore in February. Before making the recommendation to the finance ministry, the BB had fired the managing director of BASIC Bank for his direct involvement in the loan scam. The central bank signed a memorandum of understanding with the bank last July in a desperate bid to bring discipline.  The bank, however, failed to comply with the MoU.