Bangladesh Bank (BB) has sent a letter to National Bank Limited (NBL) instructing the private bank to appoint a managing director (MD) by 28 April as the latter has been operating without an MD for about three months.
The central bank’s letter came amid the NBL came to limelight afresh for various irregularities including disbursement of loans without approval.
The BB sent the letter to the NBL’s chairman, Monowara Haque, on Monday. It said if a managing director is not appointed by April 28, the central bank will take action in accordance with the relevant section of the Bank Company Act.
The section 15 (KA) (2) of Bank Company Act states that the position of managing director in a bank shall not remain vacant for three straight months.
The section 15 (KA) (3) says if the position of managing director of a bank is not filled up with the aforementioned time, Bangladesh Bank shall have the authority to appoint an administrator who will carry out the responsibility of the managing director.
So, if the NBL does not appoint a margining director by next Wednesday (28 April), Bangladesh Bank will have the power to appoint an administrator at the bank.
Regarding this, the executive director and spokesperson of Bangladesh Bank, Serajul Islam told Prothom Al, “The law states the position of the managing director shall not remain vacant for more than three months. If it happens, we can appoint an administrator. The bank (NBL) has been told to keep it in mind and take steps quickly.”
According to the sources, the tenure of NBL’s managing director, Choudhury Moshtaq Ahmed, ended on 28 January this year. The additional MD ASM Bulbul was made the acting MD. Allegation of irregularities surfaced during his tenure. He had been carrying out the duties even though his tenure expired. Amid such circumstance, Bangladesh Bank restricts his access to all documents of the bank. Later on, the NBL chairman extended the tenure of ASM Bulbul for a month, but Bangladesh Bank again ordered to relieve him of his duties.
In a letter sent to the chairman of NBL, Monowara Sikder, on 7 April, the central bank said the appoint of ASM Bulbul to carry out the responsibility of an acting MD violates the instructions as stated in the article 4.1(Cha) of the circular issued by Bangladesh Bank. Therefore, ASM Bulbul has been barred from carrying out the responsibility of the acting MD directly or indirectly.
Following the central bank’s instruction, the NBL’s board of directors appoints deputy managing director Shah Syed Abdul Bari as the acting managing director. After that, ASM Bulbul isn’t coming to the bank. It will be three months on 28 April since the position of the NBL’s managing director has become vacant.
However, this is not the first time that the position of the MD at a private bank remains vacant for long. Previously, the position of the NBL’s MD had remained vacant for six months. The central bank didn’t take any step at that time, but this time they became active. Besides, Bangladesh Bank and Bangladesh Financial Intelligence Unit (BFIU) are investigating various irregularities at the NBL.
Following the death of NBL chairman Zainul Abedin Sikder, his wife Monowara Sikder becomes the new chairman of the bank while her daughter Parveen Haque Sikder, Rick Haque Sikder and Ron Haque Sikder are the directors of the bank. Besides, two officials of Sikder Group -- Naimuzzaman Bhuiyan, who also work in the media, and Badiul Alam – are the independent directors of the bank. Among others, Khalilur Rahman of KDS Group and Moazzam Hossain and Mabroor Hossain of Hoassaf Group and businessperson Zakaria Taher are also the members of the NBL’s board of directors.
Monwara Sikder couldn’t be reached for comment on the central bank’s letter.
Currently, loans stand at about Tk 430 billion (43,000 crore) and deposits stand at more than Tk 450 billion (45,000 crore) at the National Bank, which is first generation private bank.
The bank provides service at home and abroad. That is why people involved in the sector think incidents related to the NBL should be taken seriously because it may affect the entire banking sector.