A dispute has surfaced among the directors of National Bank Limited (NBL) over the control of the private bank after the death of its chairman.
Things turn bad to worse as the bank disbursed loans flouting rules while the additional managing director (MD) continues discharging duties as the acting managing director despite his tenure expires.
Bangladesh Bank also has to interfere from time to time.
The Sikder family controls the NBL. The sons of the bank’s late chairman Zainul Abedin Sikder want to fully take control of the bank. On the other hand, the late chairman’s daughter and lawmaker Parveen Haque Sikder and other directors want to revive the image and the financial loss of the bank. So, she wants to protect it from her brothers.
On Monday, Bangladesh Bank asked additional managing director ASM Bulbul to refrain from discharging duties as the acting MD. Controlled by the sons, NBL chairman Monwara Sikder on Tuesday approved the extension of ASM Bulbul for one more month, effective from 1 April. The Bangladesh Bank revoked the decision on Tuesday noon. Amid these circumstances, the chairman of the bank’s executive committee, Perveen Haque Sikder, has ordered to call a meeting of the committee urgently.
According to sources at the NBL, the 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. The sons of the late chairman are mainly running the NBL. As a result, NBL has disbursed new loans worth Tk 4.5 billion (450 crore) in the first quarter (January-March) of 2021.
Besides, the bank disbursed Tk 1.13 billion (113 crore) from the government’s incentive package. With the interest worth Tk 6.5 billion (650 crore), the amount of loan has increased to 12.13 billion (1,312 crore) in the first three months. Deposits have increased by only Tk 5.21 billion during this period. Besides, 40 of its branches face loss.
The bank’s loans has increased to 420.64 billion (42,064 crore) in March this year from Tk 408.51 billion (40,851 crore) in December last year. The amount of deposits increased to Tk 435.95 billion (43,595 crore) from Tk 430.74 billion (43,074 crore) during this period. Amid such circumstance, the central bank suspended the approval and disbursement of NBL’s loans and ordered to relieve additional managing director ASM Bulbul of all duties and restrict his access to all documents of the bank. He has been carrying out the duties even though his tenure expired.
What happened Tuesday?
Amid this situations, ASM Bulbul and others officials of the banks went to the residence of chairman Monowara Begum on Tuesday morning at the instruction of the sons of Zainul Abedin Sikder. The chairman approved one-month extension of Bubul’s tenure considering his good service and the responsibility of the MD. He will be discharging the duties of the acting MD and the next meeting of the bank’s board of directors will approve it, the chairman said in a letter. The NBL then sent its responses along with the letter to the Bangladesh Bank, but the central bank rejected the extension of Bulbul’s tenure.
ASM Bulbul told Prothom Alo on Tuesday afternoon, “The chairman of the bank has extended my tenure for a month. I will be discharging the duties of acting MD in addition to the post of an additional MD. The matter will be finalised in the board of directors’ next meeting, to be held in 10-15 days.” He, however, was unavailable over phone when Prothom Alo approached him about the decision of Bangladesh Bank.
The central bank, in a letter to NBL chairman Monowara Sikder, said that appointing ASM Bulbul as the acting MD of the bank is against an article of the circular of Bangladesh Bank. So, Bulbul should be relieved of discharging any direct or indirect duties of the acting MD immediately.
An article of Bangladesh Bank’s circular on appointment of directors states that one of the major responsibilities of the board of directors is to appoint an honest, skilled, experienced and competent MD in the bank management to strengthen the bank’s financial foundation and gain depositors’ trust. The board of directors will appoint a competent MD with the approval of Bangladesh Bank.
Executive director and spokesperson of Bangladesh Bank Serajul Islam said, “Procedure was not followed properly to extend his (Bulbul’s) tenure. So he has been instructed to refrain from discharging the responsibility of the MD. He can’t carry out the responsibility of MD directly or indirectly."
After that, Parveen Haque Sikder sent a letter to NBL deputy managing director Shah Syed Abdul Bari directing to call a meeting of the executive committee urgently.
Parveen Haque Sikder, in the letter, said she is ordering to call an online meeting of the executive committee urgently following the letter of Bangladesh Bank and the news of irregularities published in Prothom Alo. Organising the meeting must not be failed by any means.
She advised to inform the members of the executive committee about holding the meeting on urgent basis. Parveen Haque Sikder also instructed the bank officials to explain on the allegations as well as the loans disbursed without approval after January. In the letter, she said that to her knowledge, the tenure of ASM Bulbul has ended on 31 March. So she instructed Shah Syed Abdul Bari to call the meeting immediately.
Monowara Sikder is the chairman of the NBL 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 and Badiul Alam – are also directors of the bank. Among others, Khalilur Rahman of KDS Group and Moazzam Hossain, Mabroor Hossain and Zakaria Taher of Hoassaf Group are also the members of the NBL’s board of directors. However, the directors other than the members of Sikder family are only for show.
Regarding this, former banker Syed Abu Naser told Prothom Alo, “The entire banking sector has become volatile and the NBL is only a part of it. This is the evidence as to what happens if a family controls a bank. They even don’t care about the regulatory agency.”
“In fact, those who get political support behave in such way. The central bank must take stern stance and the government must not deter the central bank since many good deeds of the government have been going in vain because of the several banks,” Naser added.
*This report appeared in the print and online edition of Prothom Alo and has been rewritten in English by Hasanul Banna