Bank of Bangladesh made this stern mover after it removed one of BASIC's top officials, barred the sanctioning of loans by its three branches and issued warnings about BASIC's recruitment practices.
The central bank has recommended to the finance ministry the sacking of BASIC's board chaired by Sheikh Abdul Hye Bacchu.
The central bank's General Manager, AFM Asaduzzaman, told bdnews24.com: "The secretary of bank and financial institutions division has been advised to take proper steps according to Articles 46 and 47 of the Bank Company Act."
According to the law, the central bank cannot dissolve the board of state-owned banks but can recommend such measures to the government.
Sheikh Abdul Hye Bacchu is the chairman of BASIC Bank board of directors. The members are Shubhashish Bose, Fakhrul Islam, Shyam Sunder Sikder, Neelufar Ahmed, Quamrun Naher Ahmed, Md Anwarul Islam and Anis Ahamad. The managing director is an ex-officio member.
In a recent move, Bangladesh Bank removed the bank’s MD Kazi Faqurul Islam and stopped the Gulshan, Dilkusha and Shantinagar branches in Dhaka from disbursing loans.
It later warned the bank to strictly follow regulations in matters of recruitments and promotions.
Bangladesh Bank says the steps have been prompted by BASIC's failure to protect client interest.
Central bank officials are saying BASIC Bank, which was reporting good profits and stood out as an exemplary commercial bank, started falling apart after present board of directors took charge.
In April, when a fraud running into over Tk 35 billions came to light, the board temporarily suspended six officials including a deputy managing director.