The Bangladesh Bank has kept the activities of National Bank Limited (NBL) under its close observation and is maintaining its pressure on the bank for the appointment of a fulltime managing director, a senior BB official said.
The BB official said that the central bank might take measures like the appointment of administrator to National Bank unless a managing director is appointed by the bank for its operations within the stipulated time.
To this end, the BB issued a letter to the bank on April 19, asking the bank to appoint a fulltime managing director by April 28 otherwise the central bank would take measures as per section 15-ka of Bank Company Act, 1991 that empowers the BB to appoint administrator to any bank.
‘We have instructed National Bank to appoint managing director, otherwise we would take measures as per rules,’ BB executive director and spokesperson Md Serajul Islam told New Age.
Asked whether the central bank has taken any step over allegations of irregularities in the loan approval process in last several months in the bank, Serajul told New Age that the BB’s latest letter was only about the appointment of managing director but the bank would have to follow the central bank’s instructions in loan approval.
The Bangladesh Financial Intelligence Unit has launched an investigation into the bank’s recent activities especially into the allegations of sanctioning loans in violation of rules and regulations.
The BFIU move prompted the BB to ask National Bank’s chairperson Monowara Sikder to release the bank’s additional managing director, ASM Bulbul, from serving as the bank’s managing director directly or indirectly.
The central bank issued the instruction based on its finding that Bulbul, while serving as the bank’s managing director (current charge), approved a substantial amount of loans to a number of entities without following due procedure, BB officials said.
They said that the loan proposals were neither approved by the NBL’s board nor by the central bank that prompted the central bank’s Financial Integrity and Customer Services Department to issue the instruction to the NBL chairperson to release Bulbul immediately from serving as managing director (current charge) in a direct or indirect manner.
The NBL board at a meeting on April 15 appointed its deputy managing director Shah Syed Abdul Bari as the bank’s managing director (current charge) replacing Bulbul.
However, the bank is yet to take any initiative for the appointment of a managing director with complete responsibility.
The BB’s instruction also mentioned that the appointment of Bulbul as its managing director with current charge was a violation of BB’s regulations.
On April 5, a day before the BB’s instruction to release Bulbul, a FICSD letter asked NBL to produce all meeting proceedings of board and executive committees meetings held after December 26, 2020.
The bank was also asked to produce documents of all approved and disbursed loans.
The central bank also instructed the bank to stop approval and disbursement of loans if no board meeting or executive committee meeting were held after December 26, 2020.
Besides, the bank was asked to provide all sorts of documents against the approval of loans to Rongdhanu Builders, Desh TV, Rupayan and Shanta Enterprise along with detailed account information of the entities.
Following the BB’s letter, Monowara extended the appointment of Bulbul for one month on April 6 and the approval was placed for the BB’s approval.
The central bank, however, rejected the application through its letter on the same day.
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