The managing director (MD) of NRB Bank, Mamun Mahmood Shah, has recently stepped down from his position, nearly two weeks before completion of his tenure in the office.
In the previous year, four other banks witnessed resignations of their MDs, while the central bank reinstated the resigning MDs to their positions in three of the cases.
According to reliable sources at NRB Bank, the bank sanctioned a number of loan applications in the last few months in the face of pressure from some directors. And the loans went irregular.
Recently, the bank faced similar pressure to approve some more loan applications, mostly in favour of 'anonymous' entities. The managing director left his position in the aftermath of the undue pressure for loans, said the sources.
While talking to Prothom Alo, Mamun Mahmood Shah did not admit the issue and limited himself to saying that there is no work environment in the bank.
“I have resigned before completion of the tenure as there is no work environment in the bank,” the resigning MD said.
NRB Bank, established under the initiative of expatriate entrepreneurs, is one of the three banks that received approval from the Bangladesh Bank in 2013.
Though the bank was established completely by expatriate entrepreneurs, some of the directors are now permanently residing at home, and some others have moved away from the banks.
There are allegations that the bank has now turned a hostage in the hands of a group. Still, it registered improvements in different financial indicators last year.
Reasons behind the resignation
As per documents, the bank sanctioned a Tk 550 million loan in favor of Alliance Hospital on 18 September last year. The hospital operates in a rented building and provided no collateral against the loan. As usual, the loan recovery has already become irregular.
In the same way, a newly registered enterprise called Barun Corporation received a loan of Tk 190 million from the bank in August last year. The loan is also not being repaid regularly.
Later, the bank disbursed Tk 40 million to an entity named Bela Agro in the same month, and it also received the same fate.
Some more applications for such loans are now awaiting approval in the bank, and there are pressures on the management to clear them.
Against such a backdrop, the MD stepped down from his position. He joined the bank on 3 February 2021 and was scheduled to complete the tenure on 2 February this year. In his resignation on 21 January, he mentioned that he is unable to continue the job until the expiration of the contract due to personal issues.
Another source within the bank said the practice of disbursing loans to anonymous entities began following the tactful removal of its founding chairman, Iqbal Ahmed.
Some directors of the current board joined the irregularities later. Some of them are now working full time in the bank. A majority of the current directors are involved with a particular group.
Contacted, Mahtabur Rahman, chairman of the bank, told Prothom Alo that the bank released the MD two weeks before completion of his tenure due to his sickness. He is a good person, and the bank improved a lot under him. The authorities may appoint him again to the position if necessary.
Financials
Among the fourth generation banks, the NRB Bank is the only one not involved in aggressive banking. Some other contemporary banks saw their deposits exceed Tk 20 billion, but the NRB Bank did not follow suit.
In 2021, the bank's deposits were Tk 44.75 billion, and it rose to Tk 66.85 billion at the end of last year. Its disbursed loans were Tk 42.40 billion in 2021, and the figure stood at Tk 60 billion at the end of last year. The amount of defaulted loans is Tk 3 billion or 5 per cent.
The bank made a net loss in 2019 but managed to make a profit of Tk 630 million in 2021. The figure reduced slightly to Tk 550 million in 2022. Besides, it posted an operating profit of Tk 1.44 billion last year.