Gratification Galore

Many officials of Bangladesh Bank responsible for oversight of private banks have joined them after retirement, raising serious ethical questions.

Sheikh Abdullahbdnews24.com
Published : 26 June 2013, 00:10 AM
Updated : 27 June 2013, 07:19 AM

Ataul Haque, a former Deputy Governor, had taken over as Managing Director of private-run IFIC Bank, whose oversight he was entrusted with before his retirement in 1998.

Three other top central bank officials had joined Uttara Bank, First Security Bank and Premier Bank, again the very banks they supervised before retirement.

They are Syed Saykhul Islam, Yusuf Abedi Harun and Abdur Rahim.

And recently, three more Deputy Governors have joined BRAC Bank, Prime Bank and South East Bank -- Nazrul Huda, Ziaul Hasan Siddiqui and Murshid Kuli Khan.

Another Deputy Governor Md Rumi Ali is now the Director of BRAC Bank. He also served as the Chairman of the bank for a few months
There is no legal bar to any Bangladesh Bank employees joining any other bank after retirement but the trend seems to be flagrant breach of propriety and professional ethics.
A Bangladesh Bank official told bdnews24.com on condition of anonymity that these officials responsible for oversight indeed favoured the banks they later joined.
A particular official recommended changing the structure of loans defaulted to benefit BRAC Bank in SME loans, the official said.
“Any official who worked under a particular senior official finds it hard to take any tough decision against the bank he now works," he said referring to those joined Prime and South East Bank after retirement from Bangladesh Bank.
Recently Prime Bank charged Tk 200 a customer as ‘statement generation fee’.
Despite directives from the Bangladesh Bank for a refund, South East Bank authorities paid no heed.
The central bank had sent inspectors to probe five Chittagong branches of this bank on this issue, but they returned without completing the investigation.
Former governor of Reserve Bank of India YV Reddy finds this trend of Bangladesh Bank officials joining other banks after retirement grossly unfair.
“This challenges the fairness of the apex bank. It may also undermine the law,” he said speaking at a recent programme arranged by BIBM.
Public servants cannot contest elections within three years of retirement because they have the opportunity to use unfair influence.
A similar clause in service terms must be enforced for Bangladesh Bank officials, former Governor Faras Uddin said.
“From what I know, seven of the nine former Governors were involved with the financial sector in some way or the other. Also, many Deputy Governors or Executive Directors are now involved with other banks,” he told bdnews24.com.
“It is not illegal but it is unfair, it raises ethical questions. There is no harm if retired officials join other institutions. But it will not be proper if they dispense favours when in position to those who favour them later.”
He called for a guideline on the issue. “Bangladesh Bank had formulated a guideline for appointment of Advisor to commercial banks in 1998. There it was said that no political office holder can be a paid advisor to any banks.”
“For Bangladesh Bank officers, it can be said that they cannot join any positions of any banks within three years of retirement,” Faras Uddin insisted.
But another former Governor Saleh Uddin Ahmed saw no problems with Bangladesh Bank officials joining other banks, but felt it should be left to officials to go by personal ethics.
“It will depend on the individuals and what a Deputy Governor or Executive Director likes to do after retirement. But it is not right if they favour banks and then join them. It is a very wrong thing,” he said, hoping Bangladesh Bank officials will uphold professional ethics.
Other retired central bank officials who are now serving in banks include former Executive Director Yasin Ali (Prime Bank), former General Manager Ashok Bandhu Das (BASIC Bank), former General Manager Nitai Das Saha (National Bank), former Executive Director B B Debnath (AB Bank), former Executive Director Abdur Rakib (Islami Bank), former Executive Director Kazi Anwarul Mahbub (SIBL), former General Manager Rafiul Alam (Al-Arafah Islami Bank).