Following a central bank recommendation to abolish the board of directors of BASIC Bank, the finance minister has said the government will restructure the board.
Published : 29 May 2014, 07:34 PM
The central bank on Wednesday recommended the dissolution of the board of the state-owned bank, based on allegations of loan fraud, corruption and irregularities.
Asked how the finance ministry was planning to act on this, AMA Muhith told bdnews24.com, "I haven't seen the letter, but I spoke to the governor in the morning and I am aware of all the issues."
"If we dissolve the board, who will look after the bank? So we're going to restructure the bank," he said.
He said the restructuring would be done soon.
After the Hall-Mark scandal, the central bank also recommended dissolving the Sonali Bank board. The government restructured the board.
The central bank 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.
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.