Dissolve BASIC Bank board: BB

The central bank today recommended to the finance ministry to dissolve the board of directors of BASIC Bank for loan irregularities.

Bangladesh Bank this morning sent a letter to the ministry in this regard, sources said.  

The recommendation came three days after the central bank fired the BASIC Bank Managing Director Kazi Faqurul Islam for presiding over a period of serious irregularities at the state-run scheduled bank. 

Earlier on May 25, a standing committee headed by Nazneen Sultana, deputy governor of BB, found him to be culpable of seven counts of offence, including lack of sound management, failure to safeguard depositors' interests and loan irregularities.  

The jugdement, which took effect May 25, also forbids Islam from seeking employment in another bank over the next two years.

“All offences against you have been proved to be correct. As an MD, you have completely failed in your duty to look after the bank,” the Bangladesh Bank (BB) said in a letter to Islam.

BB investigations found that the bank's Gulshan branch extended a fresh loan of Tk 50 crore to a default borrower, Delta System Ltd, which is prohibited by the Bank Company Act, said the letter.

Upon learning of the transgression, BB straightaway sent instructions to classify the loan, which BASIC Bank failed to act on. “That was a complete disrespect to the central bank directive,” said the letter.

Not only that, a further Tk 30 crore loan was extended to the same client, according to the letter sent to MD Kazi Faqurul Islam.