Failure To Stop Loan Scam<\/em>
\nBB for reconstituting Sonali Bank board<\/strong>
\nThe central bank yesterday requested the finance ministry to reconstitute the board of directors of Sonali Bank Ltd for its failure to stop Tk 3,832-crore loan scam.
\nIn a letter to the finance minister, Bangladesh Bank Governor Atiur Rahman said the nature of the irregularities at the state-run commercial bank was very serious.
\n\u201cIt is not credible at all that nobody had noticed it although there are a number of stages at the governing and management structure in the bank,\u201d said the letter.
\n“Obviously such a huge amount of money has been embezzled with the consent of the higher authorities or in connivance with them,” a finance ministry official quoted the governor as saying.
\nThe central bank has also sent a copy of the letter to Banking Division Secretary Md Shafiqur Rahman Patwary, who had talks with Muhith about the letter at the secretariat in the afternoon.
\nThe finance minister also had a meeting with Sonali Bank Chairman Quazi Baharul Islam, said an official of the finance ministry.
\nA number of officials of the Ruposhi Bangla Hotel branch of Sonali Bank were involved with an embezzlement of Tk 3,547 crore. Of the amount, Tk 2,686 crore went to little-known Hallmark Group.
\nBesides, the Gulshan and Agargaon branches of the bank gave loans amounting Tk 144 crore and Tk 140 crore respectively beyond their authority, stated the central bank letter.
\nAccording to sources at the finance ministry, the governor in his letter said the loan scam at Sonali Bank had not only sullied the state-run bank, but also negatively impacted the whole banking sector of the country.
\nRahman said the loan scam took place due to lax supervision, weak risk management and faulty internal control management. It was the responsibility of the board to oversee all business activities.
\n\u201cAs a result, all responsibility of the irregularities falls on the board. In this case, the board of directors was not able to discharge its responsibilities. It seems the board was not able to play an effective role in protecting the interest of the depositors of the country’s largest state-run bank,\u201d he said.
\nRahman has requested Muhith to take necessary decisions to reconstitute the board of directors of Sonali Bank.
\nThe letter said Bangladesh Bank’s inspection, a report prepared by the internal audit department of Sonali Bank and later a performance audit by an independent firm have found that Tk 3,547 crore was embezzled at the Ruposhi Bangla Hotel branch between 2010 and May 2012.
\nThe irregularities took place through issuance of letter of credit (LC) in favour of Hallmark and other groups beyond authority, internal bills purchase, purchase of fake export bills and packing credits, by creating accommodation bills against issuing LCs in favour of the groups; and giving loans to clients through vouchers.
\nThrough the irregularities, the branch provided loan facilities to Hallmark Group, T and Brothers, Paragon Group, D n Sports, Nakshi Knit and Khan Zahan Ali.
\nThe central bank also conducted inspection on the Gulshan branch and Agargaon branch of Sonali Bank and unearthed more financial irregularities.
\nIn 2010, Bangladesh Bank’s inspection on Ruposhi Bangla Hotel branch found that the Hallmark Fashion and others had been given pre-shipment credit beyond limit against LCs worth $48.93 lakh.
\nThe same inspection found that in the case of Hallmark, the credit limit rose to Tk 350.31 lakh from the approved limit of Tk 60 lakh.
\nAt the time, Sonali Bank wrote to the central bank that the credit limit would be brought to the approved level.
\nBut the central bank letter said it had unearthed financial irregularities involving a huge amount of money in case of the Ruposhi Bangla Hotel branch and some other branches.
\nThe central bank letter said as the Sonali Bank board did not take steps against the irregularities detected in 2010, the loan facility in favour of a single group borrower, Hallmark Group, rose to Tk 2,686 crore in 2012.
\n“It is also surprising that instead of taking measures against the official directly involved with the irregularities, the February 2011 audit report of Sonali Bank highly praised the official and later he was promoted. But there is provision that every audit report of the bank will be presented at the board through audit committee,” said the central bank letter.<\/p>\n

-With The Daily Star<\/span> input<\/p>\n","protected":false},"excerpt":{"rendered":"

Failure To Stop Loan Scam BB for reconstituting Sonali Bank board The central bank yesterday requested the finance ministry to reconstitute the board of directors of Sonali Bank Ltd for its failure to stop Tk 3,832-crore loan scam. In a letter to the finance minister, Bangladesh Bank Governor Atiur Rahman said the nature of the … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","footnotes":""},"categories":[41],"tags":[1986,8654,1819],"yoast_head":"\n