Staff Reporter :
The Bangladesh Bank (BB) is closely overseeing the operations of 11 reconstituted bank boards, including 8 previously under the control of S Alam.
The central bank is monitoring everything from the daily operations of these banks to their overall performance indicators.
The central bank is scrutinising how these banks are grappling with the challenges arising from the fund embezzlement by former directors and exploring solutions.
For this purpose, three separate committees have been initiated. A responsible source from the Bangladesh Bank has confirmed this information.
A fund manager from one of these banks, requesting anonymity, informed that the former directors had siphoned off funds from the bank like water.
Some dishonest bank officials had colluded with them to withdraw funds under fictitious names.
However, these officials are still employed in the bank. Not only that, but the old management is also being informed about the steps taken by the reconstituted boards.
As a result, the reconstituted boards are facing difficulties in carrying out their duties effectively.
Moreover, some board members lack experience in bank management, particularly in Islamic banking.
This is causing a slowdown in bank operations. Overall, there is a sense of instability in these banks.
A director from another bank revealed that these banks are experiencing a severe liquidity crisis.
The previous directors had withdrawn funds under fictitious names.
The actual amount of non-performing loans in these banks is significantly higher than what was previously reported. For years, these loans were falsely categorized as performing assets through various manipulations.
However, these loans are now turning into non-performing assets, requiring higher provisions.
Meanwhile, the actual income is decreasing, leading to a severe liquidity crisis.
The Bangladesh Bank is being informed about this crisis on a regular basis. Customers are unable to withdraw their funds, causing widespread panic. As a result, these banks are on a downward spiral.
A source from the Bangladesh Bank stated that they are in constant communication with the bank boards and are monitoring their activities.
They are trying to find solutions to the problems faced by these banks in the changed circumstances.
A meeting was held with Exim Bank yesterday (Monday) to discuss their ongoing issues. A list of former directors who have taken loans from these banks and failed to repay them has been requested.
Their assets are being assessed. If they fail to repay the loans, their assets will be seized to compensate the depositors. Instructions have also been given to expedite the identification of their assets.
When contacted, Bangladesh Bank’s spokesperson, Husne Ara Shikha on Tuesday told The New Nation, “We are closely monitoring those reconstituted banks’ board’s activities to seek anything assistance is needed for further strengthening them.”
She said the governor of the central bank almost everyday engaged in meeting with those boards.
“Concern officials of the central bank closely are monitoring the documents over those boards activities regularly,” she said.
It is noteworthy that during the previous government, S Alam, a controversial businessman from Chittagong, acquired ownership of 8 banks using state machinery.
Following the change of government on August 5, the Bangladesh Bank reconstituted the boards of these 8 banks.
Additionally, the boards of UCB Bank, National Bank, and Exim Bank were also reconstituted. S Alam alone is alleged to have embezzled approximately 200 billion taka from these 8 banks, most of which was laundered.
On the other hand, Nazrul Islam Majumdar held the position of chairman of Exim Bank for over a decade.
There are allegations that he also embezzled a significant amount of money from this bank. Multiple teams from the Bangladesh Bank are conducting inspections at these banks to ascertain the amount of money embezzled and how it was laundered.