Hallmark Scam Probe
Fin min seeks BB opinions on JS body suggestions
The finance ministry has sought opinions from Bangladesh Bank about implementation of the parliamentary standing committee’s recommendations those include giving the central bank full regulatory power in the banking sector. The standing committee on the finance ministry, after conducting an investigation into the Hallmark Group-Sonali Bank loan scandal, recently placed a number of recommendations before the government to check such fraudulent act and loan scam in the banking sector.
The ministry sent a letter to BB governor Atiur Rahman last month seeking his opinions on the recommendations.
A BB official told New Age on Monday that the standing committee had made a recommendation to give regulatory power to the central bank by ensuring its accountability to the government and parliament as it (BB) now cannot enjoy full power to control the state-run banks.
The state-run banks are frequently facing scams due to an absence of a central intervention, he said.
The standing committee recommended that the government should follow the ‘fit and proper test’ to appoint the directors in the scheduled banks to check fraudulent act and forgery.
The BB official said that the standing committee had made the recommendation as the board of directors of Sonali Bank was involved in the Hallmark scam.
The standing committee in its recommendations paper proposed downsizing loan sanction limit by the high officials of Sonali Bank to check scams.
The limit of loan sanction by managing director of Sonali Bank should be trimmed to Tk 3 crore from the existing Tk 18 crore, that of deputy managing directors to Tk 50 lakh from Tk 10 crore and that of general managers to Tk 20 lakh from Tk 5 crore, according to the standing committee’s proposal.
During the investigation the standing committee did not find the proper existence of an executive committee of Sonali Bank although such committee plays a significant role in running the board of directors.
The committee proposed holding of at least one meeting of EC in every week and it proposed that EC should sanction loan up to Tk 5 crore after verifying the applications of the borrowers.
The committee recommended changing of the ‘know your client’ form of the banks from time to time as the assets and liabilities of the clients usually change.
The committee proposed formulation of new acts and rules to issue, advise and negotiate local letters of credit.
No bank will give acceptance against LCs avoiding the internationally recognised SWIFT system.
Activities of the scheduled banks should be conducted with digitization process as it will reduce the cost of banks and increase their internal controls.
Branches of the banks should take approval from their general manager office concerned to transfer fund from one branch to another branch.
The finance ministry asked the BB governor to send the central bank’s opinions to the ministry in the quickest possible time.
-With New Age input
