BB officials involved in fund heist, says Muhith

Abul Mal Abdul Muhith
Abul Mal Abdul Muhith

The finance minister, AMA Muhith, has said some of the Bangladesh Bank officials are involved in the US101 million heist of the central bank fund deposited with New York Federal Reserve.

He came up with the observation when he was talking to Prothom Alo during an exclusive interview.

“Most certainly they are. This cannot be possible without complicity of the locals. There are handprints and biometrics of fix persons at the federal reserve,” the finance minister expressed his views referring to the process.

Muhith also castigated Atiur Rahman, who just resigned from the post of central bank governor, saying that he was more busy doing public relations all over the world, other than performing his duties.


The full text of the interview is given below:


Prothom Alo (PA): The Bangladesh Bank governor had to resign when the central bank’s reserve fund heist was uncovered. You removed two deputy governors too. It looks like you acted immediately.


Finance Minister (FM)
: Yes. But I am amazed that Atiur Rahman held a press conference. He was not embarrassed at all.


PA
: Was that a press conference, or was he offering an explanation?


FM
: It wasn’t an explanation. It was a press conference. He held press conferences twice at his house, once before his resignation and once after. He also tried to offer the prime minister all sorts of explanations. It was because of him that two deputy governors lost their jobs. He wanted to place the responsibility on others too. He tried to get a few others dismissed from their jobs too. That didn’t happen and it won’t happen.


PA
: Anyway, you have appointed a new governor. What measures are you taking to recover the money?


FM
: I cannot say for sure that the money will be recovered. We have managed to get some back, thanks to Sri Lanka.


PA
: What did Atiur Rahman do when he learnt about the heist?


FM
: What can I say? He simply didn’t comprehend the gravity of the crisis. I think he couldn’t fathom out just how serious an incident this was. Even after he learnt about the matter, we went ahead with his foreign trips.


PA
: You were also supposed to go to the Delhi meeting.


FM
: This was basically an invitation from the Indian finance minister Arun Jaitley. He invited me too. I had thought I would go but later decided against it.


PA
: But Atiur Rahman had his fair share of successes…


FM
: His contribution to the central bank is almost zero. He simply went to trips all over the world and requested people to invite him and give him the chance to deliver speeches. All of this is now coming to light.


PA
: But there are the success stories of green banking, of the chance for farmers to open accounts with 10 Taka and so on.


FM
: These are slogans. He only carried out PR work. There is a lot of talk about all these things.


PA
: Atiur Rahman has tried to say that he had given recommendations to the finance ministry about action regarding the Basic Bank, Hall-Mark scams.


FM
: Not true. These are much discussed issues now. Basic Bank is an old issue. The first audit report about Basic Bank was good. It was Bangladesh Bank that covered everything up from then.


PA
: You had said you would take action against the former Basic Bank chairman Abdul Hye Bacchu, but eventually you didn’t.


FM
: Yes, I had said so. Measures haven’t been taken as yet but are underway. All political matters cannot be discussed openly. But action will be taken certainly. The Anti-Corruption Commission (ACC) couldn’t handle the matter properly. When the matter goes to court, the court will want to know all the details and then steps will be taken against the man.


PA
: And Hall-Mark?


FM
: There is a case against Hall-Mark. I think our lawyers are not very attentive about the matter.


PA
: What are you doing for the overall security of the banking system?


FM
: Reforms are required for the central bank. Its management is inefficient. The governor used to be more engrossed in public relations rather than bank management. There is no account of the profits being made in the transactions that take place on the ground floor of Bangladesh Bank. The Bangladesh Bank people divide it up among themselves. Atiur Rahman never took action against this.


PA
: Where thousands of crores of taka are being siphoned off from the banking system, four to five thousand is nothing!


FM
: It’s going every day! Bangladesh Bank should be a secluded place. That was how it was before. Now it’s like a huge bazaar. Direct transactions are taking place in the room on the ground floor. This would take place at Sonali Bank before.


PA
: Did you mention this to Atiur Rahman ever?


FM
: I had told him many times to pay attention to banking. He would just say, I have done this, I have then done that. Just a couple of days ago he
claimed credit for the 28 billion dollar reserve. But basically the credit for these reserves goes to our expatriate workers.


PA
: Large reserves are not always given much importance.


FM
: Well, it’s good to have the money. But it would be even better if this could be invested. We haven’t been able to do that as yet.


PA
: Is it because of our reserves that we have had the courage to take on constructing Padma Bridge without own financing?


FM
: No, Padma Bridge has nothing to do with our reserves. If the reserves are good, our expatriates are confident that there is money back home. If not, they may decide to transfer they money to other countries.


PA
: Will the siphoning off of funds from the reserve be a deterrent to remittance from the expatriates:


FM
: I believe that will not be so. They will understand it was a matter of mismanagement and this had been caught.


PA
: What would you say about Atiur Rahman’s excuse that the heist took place on Friday, a holiday, and so action was delayed?


FM
: A totally implausible excuse. Why won’t there be people on a Friday? There have to be people there on Friday to answer calls and provide information.


PA
: Do you think Bangladesh Bank officials are involved in this scam too?


FM
: Most certainly they are. This cannot be possible without complicity of the locals. There are handprints and biometrics of fix persons at the federal reserve. The rule is that the transactions are activated only after the handprints of the six persons are serially placed on a specified plate.


PA
: As to why he didn’t inform the top level of government even a month after the incident, Atiur Rahman says he was too puzzled.


FM
: That is wrong. I appointed him as the governor, yet he always would claim that he was appointed by the prime minister. He even tendered his resignation to the prime minister. He cannot do that. This is not a resignation. The rules aren’t followed in our country. In any other country he wouldn’t even have been able to meet the prime minister without my permission.


PA
: Is there a problem in the ‘chain of command’?


FM
: Yes, definitely. The prime minister didn’t appoint him, I did. He must submit his resignation to me.


PA
: In the past seven years, did Atiur take your advice?


FM
: No he didn’t though I did give him advice. All ministries have a problem with the central bank when it comes to the monetary policy and revenue policy. This happens in India too and all countries. Other than in the US, everyone intervenes in the monetary policy. Bangladesh Bank has independence. It has always worked accordingly. I have always accepted whatever Atiur did about the monetary policy.


PA
: Will you give him credit for that?


FM
: Well, I guess I will, but I have something to say about that too. I don’t want to talk big, but there is no one near me in expertise in the entire world when it comes to what I have done in budget management over the past seven years.


PA
: From what you say, Atiur Rahman was more focused on other things rather than major tasks at the central bank. The onus is on you too as you were the one who appointed him…


FM
: As far as I know, Atiur Rahman is financially honest. However, he would often complain that he couldn’t work independently. Rubbish! In all these years I only issued three or four directives to Bangladesh Bank.


Once the prime minister and I decided the over-exposure of the share market would continue for a few more years. Yet Atiur Rahman used the bank company act to limit this to one year. What nonsense!


PA
: You have begun the pre-budget discussions for the 2016-17 fiscal…

FM: Yes. Last year we failed to meet the target because the NBR chairman does nothing.


PA
: Are you meaning the present chairman?


FM
: Yes. He does nothing. He just delivers long speeches. He too is involved in public relations. I have no objection to that, but he has to do his work too. It’s been a year since he has been in the post, yet he knows nothing about how NBR operates.


PA
: Budget allocations remain unutilised…


FM
: all ministries have the problem of failing to ulitise allocated funds. The achievements of the past seven years have made everyone complacent. They’ve lost that drive.


PA
: It is said that corruption is often the motivation behind the extension of many big projects. What would you say?


FM
: Firstly, we do not have the experience and so we cannot draw up proper estimates. We just give a general approval. Secondly, we have dubious characters. They moment we see a big project, we want a big cut from it.


PA
: How can this be prevented?


FM
: Digitisation is the key, but the problem is that many are opposed to digitisation.


PA
: Do you think any innocent people have been indicted in the theft from the reserves?


FM
: Only Aslam Alam is innocent. He has been made OSD. That may be a minor punishment, but his reputation has been tarnished. I had called Aslam the day before and told him that he was being targeted too, though he was innocent.


PA
: You speak of reforming Bangladesh Bank. Who will bring about the reforms?


FM
: I have asked the new governor to take time to carry out an overall review and then take I will take initiative.


PA
: NBR is your agency, so aren’t you also responsible for the chairman’s failure to work?


FM
: He talks too much; he should be made the information secretary. He was PS to the former speaker Humayun Rasheed Chowdhury so I guess something has rubbed off from there. As for my responsibility, he has powerful bureaucrats on his side. I told the prime minister it was difficult working with him. He keeps up his political contacts too.


PA
: Tell us about the new governor.


FM
: He is good. He was my finance secretary. I know him. He will soon learn the ropes of running the central bank.


PA
: Thank you.


FM
: Thank you too.