National Bank Limited, a private sector bank, has prepared to disburse big loans and has also disbursed some loans without approval, Bangladesh Bank officials have said.

Moreover, the tenure of the bank’s additional managing director (AMD), ASM Bulbul, has expired, but he is discharging duties as the acting managing director (MD).

Under such circumstance, Bangladesh Bank on Monday postponed disbursement and approval of all loans of the bank.

National Bank has to take approval from the central bank for the disbursement of loans.


The longtime chairman of NBL, Zainul Haque Sikder, died on 10 February. His wife Monowara Sikder became the new chairman on 24 February. Since then, no meeting of the bank’s board of directors was held, but the loan disbursement continues, officials said.

The sons of the late chairman are mainly running the NBL, which is a first generation bank and its loans stand more than Tk 400 billion (40,000 crore). Several top officials of the bank also involved in irregularities.

Amid theses situations, Bangladesh Bank on Monday sent a letter to the bank seeking detailed information about the bank by Tuesday.

Speaking to Prothom Alo, NBL acting managing director ASM Bulbul said the board of directors has asked him to discharge duties although his tenure has expired.

"It also happened before and there is nothing wrong in it. My term will be extended when the board meeting will be held. Besides, no meeting of the board of directors was held to disburse loans. No loan has also been disbursed either. We have received a letter from Bangladesh Bank and will reply on Tuesday," ASM Bulbul said.

What the letter contains

The Bangladesh Bank, in the letter, instructed the NBL to submit the working papers of all meetings of bank's board of directors and executive committee held after 26 December. The bank was also ordered to submit in details on the loan approval and disbursement after 26 December. The letter also stated approvals and disbursements of all loans must be suspended, if no meeting of the bank's board of directors and executive committee is held after 26 December.

The letter also asked whether NBL’s additional managing director ASM Bulbul is working with the bank. If he does so, the bank must provide the central bank with the supporting documents. And if he is not working with the bank right now, then he must be relieved of all duties and denied access to all documents of the bank.

The letter also instructed to submit detailed statements on loans (from application to disbursement) of Rongdhanu Builders, Desh TV, Rupayan and Shanta Enterprise.


According to the bank sources, the NBL has taken a preparation to disburse a large amount of loan to Rongdhanu Builders from its Dilkusha branch, to Rupayan and Desh TV from Mohakhali branch and to Shanta Enterprise from Gulshan corporate branch. A portion of these loans has already been disbursed and the remaining loans are awaiting distribution.

Sikder Group takes over NBL

With the change of the government in 2009, the NBL’s board of directors was also reshuffled. The chairman of Sikder Group, Zainul Abedin Sikder, took over the bank, eventually ousting all other directors. The Sikder family took sole control over the bank with appointing the new chairman’s wife, sons and relatives and the leaders of Awami League in the board of directors. Since then, financial condition of the bank started to deteriorate.

According to the financial report of the bank, its default loans have increased to Tk 20.85 billion (2,085 crore) in December last year from Tk 3.88 billion (388 crore) in 2009.

Among the private banks, the NBL has written off the highest amount of money to remove default loans from the balance sheet. The bank, however, couldn’t reduce the default loans. The loan written off stood at Tk 21.54 billion (2,158 crore) last year.

According to a central bank report, the NBL is not classifying many of its loans as default even though the bank has failed to recover those from many companies. As a result, the actual scenario of the default loans couldn’t be assessed.

Banks are required to maintain provisions against default loans properly, but the NBL is unable to do that for several years. The central bank also allowed the NBL to collect provisions in late giving the latter the opportunity to make profit on paper. The NBL faced a provision shortfall of Tk 4.35 billion (435 crore) until December last year.

Two sons of Sikder in the spotlight

Sikder Group MD and NBL director Ron Haque Sikder and his brother Dipu Haque Sikder had been in the spotlight after they fired shots at Exim Bank managing director Mohammad Haider Ali Miah and additional managing director Mohammad Firoz Hossain on 7 May 2020. Ron Haque Sikder and Dipu Haque Sikder are the sons of the late chairman of NBL, Zainul Abedin Sikder.

The Exim Bank authorities filed a case on 19 May, but the brother duo left Dhaka on an air ambulance as ‘patients’ on 25 May afternoon. They claimed that the aircraft belonging to R&R Aviation Ltd, owned by Sikder Group, was an air ambulance and used to leave the country for Bangkok.

The court also fined the brother duo after they filed bail petition while on the run. After the death of Zainul Haque Sikder, Ron Haque Sikder returned to the country on 12 February and he was released on bail several hours after being arrested. His bail ends on 11 April. Another brother Dipu Haque is still on the run. The investigation into the case is underway.


Regarding Monday’s letter, former governor of Bangladesh Bank Mohammed Farashuddin told Prothom Alo, “The bank (NBL) hasn’t being functioning well for long. It doesn’t have any reputation for flouting the rules and regulations.”

“Firing shots at another bank’s MD does not also give a good impression. The government has obviously understood that what happens if a bank turns into a family bank. That’s why Bangladesh Bank has stepped in and obviously, more good decision will come so that the bank can operate smoothly,” he added.

*This report appeared in the print and online edition of Prothom Alo and has been rewritten in English by Hasanul Banna

Read more from Local