September 23, 2022, 10:02 am

Prohibition on disbursement of loans by National Bank: Bangladesh Bank

  • Update Time : Monday, May 16, 2022
  • 51 Time View
Prohibition on disbursement of loans by National Bank: Bangladesh Bank

Bangladesh Bank has again locked the vault of National Bank, a banking sector institution listed on the stock exchange. As a result, the bank will not be able to give any loan of large amount. On December 30 last year, Bangladesh Bank had given approval to start the loan activities of the bank. After that Bangladesh Bank found another big irregularity. In view of this, the distribution of large loans of the bank was stopped by a letter on Thursday.

However, this time the central bank has not stopped the distribution of loans as before, but has specified the sectors in which it will be able to give loans. These include SME sector loans, agriculture, loans provided under incentive packages, loans against fixed deposits, loans with 100% cash deposit and other indirect loans (non-funded). However, the National Bank will not be able to acquire loans from any bank or financial institution.

In a letter sent by the National Bank in this regard, Bangladesh Bank said that the financial condition of the bank is deteriorating and there is a deficit in the management of the bank. This decision has been taken in accordance with the Banking Companies Act to protect the interests of the depositors.

The central bank had stopped lending to National Bank on May 3 last year on allegations of gross irregularities and corruption. Besides, Bangladesh Bank has redefined large loan and single customer loan limit for the bank. In addition, the top 20 borrowers were asked to submit loan recovery information to the central bank. As a result, the bank was good for some time. The central bank lifted the directive on December 30 last year under pressure from several large groups. Then the bank goes back to the same situation. For this reason, on Thursday, it was instructed to stop the distribution of large amount of loans again.

Among the top 20 customers of the bank are Maysha Group, Bashundhara Group, Beximco Group, NASA Group, Saad Musa, Western Marine Shipyard, FMC Dockyard, Pran-RFL, Bloom Success International, Broadway Real Estate. Bloom Success International is a group anonymous loan. Earlier, S Alam Group was the top borrower. The group has returned the original money as all the interest of S Alam Group has been waived.

It is learned that after opening the loan program on December 30 last year, the bank provided a loan facility of Rs 600 crore to Fu-Wang Ceramics and SS Steel. Both companies are owned by one person. The board of directors has decided to finance Saleh Steel for Rs 150 crore. However, the central bank blocked the loan offer. The bank has a director friend of these institutions. Due to this a large amount of money is financed in a short time. In view of this, Bangladesh Bank first warned the bank. He called a meeting of the senior officials of the bank. The central bank has directed to stop lending activities as similar activities are still going on.

Besides, the central bank has directed that the bank should submit loan recovery information from the top 20 borrowers every month. Apart from this, in case of re-appointment or contractual appointment of anyone below two posts of MD including advisor, consultant of the bank, approval of central bank is required.

In order to prevent anonymous loans, six types of conditions were imposed on May 3 last year in addition to the closure of loans. As a result, the bank had no other activities except collecting deposits and collecting loans. The bank received a significant amount of deposits. As a result, the deposit situation of the bank improved.

At the end of last April, the bank’s deposits stood at Tk 44,006 crore and loans stood at Tk 39,096 crore. The bank has made a net profit of Tk 36 crore in the outgoing year. For this you have to take various concessions from the central bank. Due to this, the bank did not pay any dividend to the shareholders for the last year. But National Bank was once one of the top three for-profit banks in the entire banking sector of the country.

With the change of government in 2009, the board of directors of National Bank also changed. The authority of the bank then passed to Sikder Group Chairman Zainul Haque Sikder. From then on, the financial health of this first generation bank started deteriorating. The bank’s chairman Zainul Haque Sikder died on February 10 last year. His wife Monowara Sikder took over as the new chairman on February 24 last year.

Trader Bangladesh, 18 May, 2022

Please Share This Post in Your Social Media

Leave a Reply

Your email address will not be published.

More News Of This Category