BASIC Bank chairman quits

Chairman of state-owned BASIC Bank Sheikh Abdul Hye Bacchu has resigned following allegations of corruption, irregularities and misappropriation of funds by him and the board of directors of the specialized bank.Bacchu tendered his resignation letter to Finance Minister Abul Maal Abdul Muhith on Friday, finance ministry sources said. The government appointed Abdul Hye Bacchu as the chairman of the BASIC Bank in September 2009 on contractual basis for three years. Later his tenure was extended by two years in September 2012.Established in 1989, BASIC was one of the best-run government banks until 2009, when the government appointed Bacchu as the chairman. Following Bacchu’s appointment, the bank’s performance started eroding as the board of directors of the bank led by him indulged in gross irregularities in sanctioning loans violating rules and regulations of Banking Company Act. Earlier, Bangladesh Bank (BB) investigations have detected massive loan irregularities involving around Tk 4,500 crore in its three Dhaka branches 2009 and 2013.It also found that the bank’s chairman has arbitrarily approved the loans to fake companies despite the branches concerned were given negative notes on the clients.As the financial health of the bank started deteriorating following series of loan scams, the central bank also appointed an observer in the bank, who submitted many negative reports to the bank about the continued irregularities.BB also some punitive measures against the bank after the loan scams. Earlier on May 25, the central bank fired BASIC Bank Managing Director Kazi Faqurul Islam for presiding over a period of serious irregularities at the state-run scheduled bank. On May 26, the central bank imposed a ban on disbursing loans from three scam-hit branches of BASIC Bank – Motijheel, Shantinagar, Dilkusha and Gulshan branches.In the latest move, BB on May 29 this year sent a letter to the Bank and Financial Institutions Division of the Ministry of Finance recommending dissolution of BASIC Bank for widespread irregularities and corruption.It also recommended the government taking actions against the bank’s chairman and board of directors as per law for their alleged involvement in the bank’s Tk 4,500 crore loan scams. But the government is yet to take any action against the bank’s top management.Meanwhile, talking to reporters at his Secretariat office on Saturday morning, Minister AMA Muhith disclosed that Bacchu went to his residence and tendered his resignation letter to him yesterday.The finance minister said, Bacchu would face punishment if found guilty.Muhith also said the government would soon reshuffle the board of directors of state-owned commercial and specialized banks. But the minister did not specify whether all the eight state- owned banks would see new board of directors soon.He said this new government reelected through the January 5 election would reorganize the board of directors of the state- owned banks to streamline the activities of public banks and establish more discipline and transparency in the banking sector.The minister, however, said it was hard to identify the proper persons for reorganizing the board of directors of banks. “The government would appoint a new chairman of BASIC Bank tomorrow (Sunday) and it would also bring changes to the board of directors of this bank,” he added.A reliable finance ministry source told The New Nation yesterday that government pushed the bank’s chairman for stepping down following his alleged involvement in Tk 4,500 crore loan scam and he finally he submitted the resignation letter on Friday.”If everything on the right track, a former chairman of Bangladesh Krishi Bank, who also served as a managing director of the scam-hit bank, will be appointed as the new chairman of the BASIC Bank,” he added.