Earlier, the bank's annual general meeting yesterday declared 36 percent dividend for the year of 2004.

After receiving the AGM notice from Premier Bank in the morning, the central bank asked the commercial bank in a written statement not to declare any dividend. The Premier Bank replied that the dividend had already been announced. Then at noon BB directed the bank management to stop distribution of the dividend.

BB sources said the embargo was imposed considering interest of the depositors as a body is investigating the irregularities by bank management in connection with its initial public offering.

Talking to The Daily Star last night, Premier Bank Chairman HBM Iqbal said, "Since the BB has imposed restriction, we will suspend distribution of the dividend." Asked about the possible reason for the embargo, he replied BB did not mention any reason.

Premier Bank earned an operating profit of Tk 93 crore in 2004 and after deducting tax, the net profit stood at about Tk 20 crore.

Nurul Alam, deputy managing director of the bank, presided over the meeting in absence of the bank's beleaguered Managing Director Kazi Abdul Mazid who is on leave.

The Securities and Exchange Commission (SEC) on February 12 suspended the Premier Bank IPO worth Tk 55 crore after a huge number of BO accounts had been found fake in its preliminary investigation.

Bangladesh Bank in its investigation on the scam detected irregularities in opening some 18,000 bank accounts with different branches of the Premier Bank apparently to use the accounts to apply for the IPO.

After the investigation, the central bank issued a show cause notice on the managing director asking him to explain his position regarding the irregularities. BB is now contemplating action against the bank management.