Muhith sees no crisis for almost bankrupt BASIC Bank

Staff Correspondent | Published at 12:05am on August 29, 2018


Finance minister AMA Muhith on Tuesday said resignation of Muhammad Awal Khan abruptly from the managing director post would not create any new crisis for almost bankrupt state-owned BASIC Bank.
He also said the resignation of the MD was an irrelevant issue while giving his reaction two days after the disclosure by the bank chairman that Awal Kkan tendered his resignation on August 14.
‘I am not worried at all about it,’ Muhith said while talking to reporters at his secretariat office.
Appointed on October 24, 2017, Awal Khan quit more than two years before the end of his three-year contract that according to the bank insiders happened because of challenges faced by him in reviving the bank experiencing risks of bankruptcy due to scams perpetuated by previous board of directors mainly led by Abdul Hye Bacchu through sanction of shady loans worth over Tk 6,000 crore from 2009 to 2014.
Answering whether the allegation of conflict between the MD and the chairman was the reason for early departure of Awal Khan, Muhith said he did not know anything about such dispute.
He also said he did not even inquire about resignation from the bank’s chairman.
All I know about the matter from the newspapers, he added.
Answering whether the resignation of Awal Khan would give negative signal about the bank, Muhith said he did not think so.
The bank would not face any major problem, he said.
From a profit making entity BASIC started to incur loss soon after the detection of scams in 2013-14.
Most of the loans extended by previous board of directors led by Abdul Hye Bacchu turned into bad loans, forcing the bank to seek bailout fund from the government to meet its capital requirement.
The state-run bank suffered a loss of Tk 2,654 crore in past four years, with 21 out of 68 branches failing to make any profit.
The government gave the bank over Tk 3,000 crore from the exchequer in last four years despite huge criticism that the taxpayers’ money was being drained into black holes.
On Sunday, BASIC chairman Alauddin A Majid said Awal Khan tendered his resignation at a meeting of the board of directors on August 14 on personal ground.
His resignation was under process as the board of directors would make a decision on the matter in the next meeting scheduled to be held on Thursday, he said.