Bangladesh Bank has appointed an observer for BASIC Bank to monitor its activities as the financial health of the scam-hit state-run specialised bank worsened in the last few months.
The central bank’s general manager (Department of Banking Inspection-1), Ashok Kumar Dey, was appointed as an observer for BASIC Bank on Wednesday, BB spokesperson and executive director M Mahfuzur Rahman told New Age on Thursday.
Mahfuzur said, ‘The financial indicators, especially the standards of the asset quality, of BASIC Bank have recently declined sharply. So the BB appointed an observer for the bank.’
He said that the observer would attend the bank’s audit, credit and board meetings so that the management and the board would take decision in accordance with the BB’s rules and regulations.
The observer will submit report to the BB if he finds any irregularity in BASIC Bank, a BB official told New Age.
The BB at a meeting last week with BASIC Bank expressed dissatisfaction over the increase in the defaulted loans in the bank.
The central bank also asked the state-owned bank to take immediate measures to reduce its defaulted loans, said officials of the BB.
The BB in July asked BASIC Bank to reduce its classified or defaulted loans to five per cent of its total outstanding loans and advances by December from 9.38 per cent.
BASIC Bank had signed a memorandum of understanding with the BB as the financial health of the bank declined significantly over the last and half years due to loan scam and corruption.
But the classified loans in BASIC Bank increased by 101.77 per cent to Tk 1,863.33 crore as of September 30 from Tk 923.47 crore as of June 30.
-With New Age input
