Farmers Bank MD AKM Shameem sacked amid loan scandal

The Bangladesh Bank has sacked Farmers Bank Managing Director AKM Shameem amid allegations of loan scandals and mismanagement at the bank. 

Abdur Rahim Badalbdnews24.com
Published : 19 Dec 2017, 07:19 AM
Updated : 19 Dec 2017, 12:26 PM

Farmers Bank founding Chairman and Awami League leader Muhiuddin Khan Alamgir resigned three weeks ago in the face of the allegations.

Governor Fazle Kabir sent the order to the Farmers Bank on Tuesday morning, said Bangladesh Bank Executive Director and Spokesperson Subhankar Saha.

“The MD was removed because he violated the bank company law by working against the interests of depositors,” he told bdnews24.com.

On Nov 26 the central bank had issued a notice asking why AKM Shameem should not be sacked and had given seven days for a response.

The notice claimed that Shameem had mismanaged the bank’s liquidity failing to preserve the bank’s cash reserve ratio (CRR) and statutory liquidity ratio (SLR). The bank had also disbursed loans in direct violation of Bangladesh Bank orders, it said.

Farmers Bank Auditing Committee Chairman Md Mahabubul Haque Chisty aka Babul Chisty also resigned.

Bangladesh Bank accepted the resignations and appointed Mohammad Masud chairman that same day.

The central bank also announced a reshuffling of the bank’s executive committee, audit committee and risk assessment committee. 

Farmers Bank was formed in 2013.

Bangladesh Bank says the organisation disbursed loans beyond the permitted limit, much of it turning into bad debt creating a liquidity crisis. 

The bank failed to attract depositors and existing depositors are increasingly opting to withdraw their funds.

As of September, the bank’s defaults stood at Tk 3.77 billion, 7.45 percent of the total loans disbursed, according to data from Bangladesh Bank.

Between March to June this year the bank only recovered Tk 70 million in loans. The bank's top 10 defaulters alone owe Tk 1.34 billion.