Top officials of the country’s scheduled banks at a meeting with Bangladesh Bank on Wednesday expressed concerns over the recent hurried changes taken place in the boards and managements of some banks.
At the meeting with the central bank’s high ups led by governor Fazle Kabir, the managing directors of the banks said that such hasty changes in the boards and managements had created panic among bankers and clients.
The MDs made the observation following changes in the boards and managements of a number of banks including Islami Bank and Social Islami Bank in last few months.
Chittagong-based S Alam Group was mostly active in taking control of Islami Bank and SIBL by buying a significant amount of shares of the banks and changing their (banks) boards and managements appointing people loyal to the business group.
The moves of the Group, which already controls five other banks, were criticised by economists while finance minister AMA Muhith expressed ‘annoyance’.
Changes were also made recently to the board of AB Bank and the boards and managements of scam-hit Farmers Bank and NRB Commercial Bank.
Association of Bankers Bangladesh president Mahbubur Rahman, who is also the managing director of Dhaka Bank, told reporters after the meeting, ‘We have told the governor that depositors and management of a bank become panicked if any type of sudden changes in ownership and management takes place.’
He said that the central bank assured them of looking into the matters.
BB deputy governor SK Sur Chowdhury told reporters that shareholders could bring changes to bank boards.
The BB oversees and will oversee if there are any irregularities regarding the changes, he said.
He also said that the central bank asked the MDs to remain alert against aggressive lending by banks.
There are evidences that banks are disbursing loans at higher amount than the approved limit putting the banks and interest of depositors at risks.
Some banks even disbursed more than 90 per cent of deposits against the limit of 80.5 per cent for general banks and 88.5 per cent for Islami banks.
General banks and Islami banks, however, can disburse loans up to 85 per cent and 90 per cent if the demand for loans remains high and financial indicators of the banks are in good shape.
Aggressive loan disbursement has recently put Farmers Bank, a private commercial bank, at risk of closure.
In November last year, loan disbursement by banks rose by 19 per cent though the BB monetary policy had set the target at 16.2 per cent.
In this context, the central bank warned the banks against aggressive loan distribution.
The BB may also lower the advance deposit ratio to check the aggressive loan disbursement by banks.
Banks were also asked to refrain from selling the US dollars violating rules and regulations amid the recent gains of the dollar against the taka, Sur said.
Bangladesh Bank also instructed bankers to keep the service charges within Tk 20 for per transaction of remittance to lower the cost of sending remittance and make the legal channel attractive to expatriate Bangladeshis.
It also asked the exchange houses operating abroad to sell the US dollars at the same rate and impose charges at the same rate for remittance services.
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