BASIC Bank faces BB ultimatum The central bank has issued an - TopicsExpress

BASIC Bank faces BB ultimatum The central bank has issued an ultimatum to the troubled state-run BASIC Bank to either sign a deal with it by 17 this month to improve its performance or face punitive measures. The directive came yesterday after the state-run bank failed to get its board’s approval for signing a memorandum of understanding (MoU) with Bangladesh Bank by Sunday last — a timeframe the central bank set last month. “If you fail to sign the MoU by 17 this month, you’ll face actions,” read the letter written to BASIC Bank’s Managing Director Faqurul Islam. The BB also warned the managing director for his failure to comply with its instructions on punishing the officials of the bank responsible for irregularities. The central bank has similar MoUs with four other state-owned banks – Sonali, Janata, Agrani and Rupali. Under the agreement, the BB reviews performance of these banks on a quarterly basis. BASIC Bank came to the spotlight after the central bank inspection detected scams involving more than Tk 4,000 crore in some of the branches. According to the inspection report, Gulshan branch alone lent more than Tk 1,500 crore between December 2009 and 2012, mostly to nonexistent companies and without complying with the bank’s rules. Shantinagar, Dilkusha and Motijheel (main branch) branches collectively granted around Tk 2,500 crore loans in the same way the Gulshan branch did. Since the scams surfaced, the BB has been trying to sign the MoU so it could intervene into the bank’s activities for performance assessment and improvement. “The MoU will attach over two dozens of conditions including BB’s monitoring in issuing new loans and rescheduling of existing loans,” said a top official of the central bank. The official said BASIC Bank is dillydallying to sign the deal sensing that more irregularities would be unearthed. Managing Director Faqurul Islam did not return phone calls and text messages. However, a senior official of the bank confirmed to The Daily Star that it had received the central bank letter and would decide on it after the bank’s Chairman Sheikh Abdul Hye Bachchu returns home from abroad next week. From

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