Photo: Collected
Metropolis Report-
In response to complaints of lending irregularities, the central bank sent monitors to Islami Bank and First Security Islami Bank on Monday.
According to Mezbaul Haque, a spokesman for the central bank, Abul Kalam, director of the Bangladesh Bank’s Forex Reserve and Treasury Management Department, will observe Islami Bank. And Motasim Billah, director of the bank’s Payment Systems Department, will hold the position at First Security Islami Bank.
The newly hired observers, according to him, will now attend the meetings of the boards of the two private banks’ executive and audit committees. They will then inform the central bank of the meetings.
According to the Bank Company Act, the central bank may appoint an observer to a bank if its financial condition deteriorates or is in danger of deteriorating.
For allegedly providing a sizable loan to a private company in August of this year, three Islamic banks grabbed headlines. Several media outlets reported that the banks have engaged in multiple lending irregularities over the past three months involving thousands of crores of taka.
As the Bangladesh Bank launched an investigation, the media stories brought the banks to light. A three-person investigation committee was created. The team has already visited Islami Bank four times in total.
Following banking irregularities, an observer was initially assigned to the Islami Bank in 2010. The well-known private bank underwent a significant ownership change in 2017. There has not been a central bank observer in the bank since 2020.
Nine public and private banks now have central bank-appointed observers, according to the Bangladesh Bank’s most recent action. Sonali, Janata, Agrani, Rupali, and BASIC Bank are state-owned institutions. One Bank, ICB Islami Bank, Islami Bank, and First Security Islami Bank are private.
