NRB Commercial Bank ousts chairman Farasath Ali, forces MD Mujibur to go on leave

The NRB Commercial Bank has ousted Farasath Ali as its chairman in a major shake-up of the board of directors after Bangladesh Bank flagged it for gross irregularities in releasing loans.

Tamal SM Parvez, the new chairman of the bank, told bdnews24.com on Sunday that the board of directors also forced Managing Director and CEO Dewan Mujibur Rahman to go on leave for three months.

Deputy MD Kazi Md Talha has been tasked with accomplishing the job of Mujibur.

Tamal said the changes were brought to ‘save the bank’s image’.

“We want the bank to do well. But it’s impossible to do so without the central bank’s help,” he added.

Tamal SM Parvez and Kazi Md Talha

He also said MD Mujibur was sent on leave instead of being removed due to legal complexities.

The High Court on Thursday stayed a Bangladesh Bank order firing Mujibur.

As part of the drastic reforms, the board on Sunday also removed Vice Chairman Toufique Rahman Chowdhury, Executive Committee Chairman Mohammed Manzurul Islam, Audit Committee Chairman Nurun Nabi, and Risk Management Committee Chairman Syed Munsif Ali.

Farasath Ali

New Chairman Parvez said the decisions were taken at a meeting attended by most members of the old and new boards at the bank’s Dhaka headquarters.

NRBC Bank started operations with seven other banks, including the Farmers Bank, in 2013.

Awami League leader Muhiuddin Khan Alamgir recently resigned as Farmers Bank chairman after a report by the parliamentary standing committee on the finance ministry flagged the bank as ‘risky’.

It said the bank created a 'systematic risk' for Bangladesh's financial sector by taking loans on high interest rates from depositors and other banks despite not having the capacity to repay after irregularities in releasing loans.

About NRBC Bank, the report says the bank made minutes of meeting of its board by forging absent directors' signature and gave loan to an organisation related to Mercantile Bank Chairman AKM Shaheed Reza in breach of the rules.

The other allegations against the bank include irregularities in drawing capital during formation, selling shares to people staying in Bangladesh instead of non-residential Bangladeshis or NRBs, and disbursing loans violating rules.

After gross irregularities over the disbursement of Tk 7 billion in loans by the NRB Commercial Bank surfaced last year, the central bank appointed an observer for the lender.

In March this year, the central bank served a notice on the bank’s chairman and managing director.

It said the board led by Farasath Ali had failed to protect the interest of the depositors.

Managing Director Mujibur has also failed to perform his duties, the financial sector regulator had said then.

It concluded the severe forgery and frauds that had occurred were criminal offences.