Rick can no more be National Bank director

Bangladesh Bank has refused to extend the tenure of directorship of Rick Haque Sikder at the National Bank board on grounds of holding default loans. 

In addition, Rick also breached the credit discipline of Bangladesh Bank (BB) to invest loans, said Md Serajul Islam, spokesperson and an executive director of the central bank.

The BB gave a letter to National Bank on Sunday informing of the issue, he said.

The bank's board was restructured after its chairman, Zainul Haque Sikder, passed away on February 10.

Zainul's spouse Monowara Sikder was elected chairman of the board on February 24.

Rick is also the son of Zainul Haque Sikder.

The financial health of the first generation bank started worsening since 2009, when Sikder Group took control of the lender's board.

Against this backdrop, the central bank recently started to gear up its monitoring on the bank.

The central bank earlier discovered a number of irregularities taking place during the sanctioning and disbursing of loans by National Bank.

The bank had also disbursed a large amount of loans among directors of other banks.

A good number of banks have been giving out such loans under mutual understanding among directors, which has created concern over corporate governance in the banking sector.

The bank gave out Tk 7,216 crore to directors of other banks, or 18 per cent of its total     outstanding loans, as of December last year, showed data from the central bank.

Defaulted loans in the bank stood at Tk 2,085 crore as of December last year in contrast to Tk 388 crore in 2009.

Non-performing loans at National Bank would have been much higher than the existing amount had the lender not written off Tk 2,154 crore last year.

The bank also faced a provision shortfall of Tk 435 crore last year due to its weak financial health.

In addition, 40 of its 214 branches are incurring losses.

Six banks in the country's financial sector now have 40 or more loss-incurring branches.