BB sees ‘negligence of duty’ as Padma Bank MD flies to Canada without permission

The Bangladesh Bank thinks Padma Bank Managing Director Ehsan Khasru “neglected duty” by breaching the rule that requires chief executives to secure the central bank’s permission to leave the country.

Such “unacceptable” action is a big obstacle to establishing good governance in banks, the central bank observed in a notice that asked for his explanation about the matter.

Khasru did not take not take phone calls or respond to messages for his comments for this story.

The Bangladesh Bank had given him until Jan 7 to come up with a statement. Officials at the Padma Bank said they do not know whether he answered the central bank, whose officials also declined to comment.

Officials at the Padma Bank said Khasru left for Canada on Dec 19 last year and is scheduled to return home on Jan 11.

The Bangladesh Bank in a circular on Mar 23, 2020 said the presence of chief executives of the banks at their workplaces is very important, but some of them stay abroad for a long time on official purpose or holiday.

“Such action slows down the bank’s functioning and create possibilities of financial losses and risks in management and operations, which is never expected,” it said. 

Thus, the circular said, all bank managing directors and CEOs will require the central bank’s permission before leaving the country.

They will need to provide details of their overseas trip in a form 15 business days before taking the trip along with a copy of the board’s permission for the chief executive to leave the country.

On obtaining the permission, they will then need to submit contact information and other details of the officials who will work in their places during the foreign trip.

In the notice to Khasru on Dec 22, 2020, the central bank’s General Manager Nazrul Islam said the Padma Bank managing director needed to inform the board of directors about the Mar 23 circular as per rule because he first needs the board’s approval to go abroad.

It is the managing director’s duty to inform the board about such important matter. The board would have reminded him of the matter before approving his holiday, had it been told about the circular on the Bangladesh Bank permission.

“But the board could not stipulate the condition (Bangladesh Bank permission) because the duty was not fulfilled properly. It means you (Khasru) neglected your duty which is a major obstacle to establishing good governance in the bank. Such activities are unacceptable,” the central bank said.

After serving Prime Bank, National Bank, Premier Bank and other banks, Khasru took charge of The Farmers Bank’s management in January 2018 when it was sinking into serious trouble. After a shake-up to the board, the bank was rechristened as the Padma Bank.  

Chowdhury Nafeez Sarafat is chairman of the bank. He is also chairman of RACE Asset Management PLC and the board of trustees of the Canadian University of Bangladesh.