BB appoints observer for scam-hit Farmers Bank

Bangladesh Bank on Wednesday appointed observer for the scam-hit Farmers Bank Ltd as it found gross violation of banking rules in sanctioning and disbursing loans and hiding defaulted loans amounting to around Tk 400 crore.
This is for the first time that the central bank appointed observer for a new bank since the  government permitted to award license to nine banks in 2013 on political consideration.
The BB issued a letter to Farmers Bank chairman Muhiuddin Khan Alamgir saying that it appointed the observer to restore credit discipline, internal control and compliance and strengthen the credit risk management of the bank.
BB executive director and spokesperson Subhankar Saha told New Age on Wednesday that the central bank appointed its general manager ANM Abul Kashem as observer for the Farmers Bank.
ANM Abul Kashem is general manager of foreign exchange investment department of the central bank, he said.
He said, ‘The central bank appointed the observer to monitor closely the operation of Farmers Bank. The observer will help reestablish credit discipline of the bank.’
According to central bank inspection reports, Farmers Bank, which started banking operation on June 3, 2013, disbursed fresh loans in favour of defaulted clients collecting fake credit information bureau reports and took over a number of loans from other banks breaching the banking rules.
The probes found that the bank’s executive committee chairman Md Mahabubul Haque Chisty, managing director Choudhury Moshtaq Ahmed, additional managing director AKM Shameem and six other officials were directly responsible for the anomalies.
Three central bank investigation teams found the irregularities in inspections of the bank’s Gulshan, Motijheel and Shyampur branches between September and November in 2015.
The central bank earlier served letters to the bank’s board chairman Mohiuddin Khan Alamgir, who is also a lawmaker of the ruling Awami League, and the managing director to take action against the officials involved in the corruption, but the bank was yet to take any measures in this regard.
The inspection found that the Motijheel branch of the bank committed irregularities in sanctioning Tk 201.05 crores between 2014 and 2015, Tk 143.39 crore at Gulshan branch and Tk 49.09 crore at Shyampur branch.
The central bank in its letters said that Farmers Bank executive committee chairman Md Mahabubul Haque Chisty and managing director Choudhury Moshtaq Ahmed were responsible for the anomalies.
It asked the board of Farmers Bank to issue show-cause notices on the two officials by December 3, 2015, but the bank did not follow the directives, the central bank officials said.

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