Bangladesh government to float bonds to rescue scam-hit BASIC Bank
Staff Correspondent bdnews24.com
Published: 2016-12-27 23:57:27.0 BdST Updated: 2016-12-27 23:57:27.0 BdST
The government plans to float bonds in a bid to save the BASIC Bank that is mired in a loan fraud.
Finance Minister Abul Maal Abdul Muhith says the government-run bank is financially in a bad shape.
“We have to keep it alive and to do so, bonds will be used,” he said to reporters at the Secretariat on Tuesday.
But it is not final how much money will be put in the bond to offset the capital deficit of struggling financial institution.
The bank wrote to the finance ministry in August proposing floating of 26 interest-free bonds worth Tk 26 billion.
The ACC had prosecuted 26 officers of the bank in September last year on charges of helping several business houses to secure disbursement of around Tk 45 billion in loans through forgery.
The three are accused in several of the 56 cases over the forgery.
Bangladesh Bank, in May last year, had removed nine top BASIC Bank officials, after its audit detected irregularities in loan disbursement from its Dilkusha, Gulshan and Shantinagar branches amounting to Tk 45 billion over a period of five years.
Most of the loans remained unpaid because many of the borrowers were untraceable.
Following Managing Director Kazi Fakhrul Islam’s sacking, the bank’s Chairman Sheikh Abdul Hye Bacchu stepped down once the scam surfaced.
General Manager Mohammad Ali was also sacked in April this year.
A probe revealed their involvement in the irregularities and loan fraud.
Moreover, the beleaguered bank is also said to have abetted money laundering.
The ACC launched an informal probe into the allegations in 2009. The official one was launched in 2010.
ACC officials said the commission formed a four-member team in 2011 after they traced ‘widespread corruption’ in the primary investigation.
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