Bangladesh Bank puts observer at National Bank

The Bangladesh Bank has appointed an observer to ensure oversight at the National Bank following allegations of irregularities in disbursement of loans.

It has said the observer will have to be informed of the agenda at least three days before the meeting of the Board of Directors of the National Bank, one of the oldest private banks of the country.

The central bank usually appoints such observers to banks and financial institutions when they face crisis.

At the moment, such observers have been appointed for oversight to three private banks -- Islami Bank, ICB Islami Bank and Bangladesh Commerce Bank -- and the state-owned BASIC Bank.

The central bank has appointed its chief for Forex Reserve and Treasury Management Department Kazi Saidur Rahman as observer at the National Bank for an indefinite period of time through a letter issued on Wednesday.

The National Bank chairman has been informed of the appointment of an observer under Sec 49 of the Banking Companies Act, said Bangladesh Bank Deputy Governor Abu Hena Md Razee Hassan.

He told bdnews24.com that the National Bank chairman has been asked to extend full cooperation to Kazi Saidur Rahman.

In recent months, irregularities have been detected in disbursement of loans at the Nimtoli and Gulshan branches of the National Bank.

The decision to appoint an observer follows that.

The observer is usually tasked to check on the legality of the decisions taken by the board of the banks and also help in clearing their financial and operational crisis.

The National Bank started off in 1983 and now has 175 branches across Bangladesh.

Zainul Haque Sikdar is its chairman and Shamsul Huda Khan is the managing director.