The Bangladesh Bank’s inquiry committee on AnonTex Group, headed by Executive Director Sheikh Abdullah, submitted its report to central bank Governor Fazle Kabir on Tuesday, a top central bank official has said.
The committee was formed about two weeks back to unearth motives behind the approval given to Janata Bank by a senior central bank official that greenlighted the state-owned commercial bank on sanctioning loans to the controversial AnonTex Group.
The official gave their approval to Janata without the knowledge of the governor and the deputy governor concerned, a central bank source said.
Deputy General Manager Husne Ara Shikha is the other member of the committee.
Their task was to investigate how such an important decision was taken beyond the knowledge of the high authorities of the central bank.
AnonTex Group, which has defaulted on about half of a Tk5,508 crore loan from Janata Bank, has been seeking fresh loans from Janata.
On October 3, Bangladesh Bank Deputy General Manager Mizanur Rahman Akon of the Financial Integrity and Customers’ Services Department sent a letter, without the knowledge of deputy governor of the department and the governor, asking Janata to accept AnonTex's new plan to secure fresh loans.
The new plan involved allowing the group to take fresh funds from other state-owned banks, reschedule its existing loans with Janata Bank and revalue its assets to make it look like a healthy company.
The green signal from the central bank came despite the fact that the Janata board did not consent to AnonTex’s proposal to reschedule its loans and revalue its assets.
On the same day, an assistant director of the same department sent another letter to Janata, asking it to take necessary steps to recover the previous loans from AnonTex.
A confused Janata Bank board sent a letter to the Bangladesh Bank requesting clarifications.
The matter came to light recently after Janata Bank discussed the two conflicting directives in its board meeting. A central bank official was also present at the meeting as an observer. This official informed the top management about the matter. Subsequently, Mizanur was transferred to another department on October 22.
In January, the central bank found in an investigation that Janata Bank had given a staggering loan of Tk5,508 crore to AnonTex through various irregularities. Of the sum, Tk2,643 crore were bad loans.
The state-owned commercial bank lent above Tk10,000 crore to AnonTex and Crescent Group, a recent Bangladesh Bank report unveiled, saying Janata did not comply with the central bank’s single borrower exposure limit criteria.
Once considered a good performer among public sector banks, Janata is now going through troubled times, former central bank governor Salehuddin Ahmed said, adding there is no visible action plan of the bank for a turnaround.
Janata faced a net shortfall in capital to the tune of Tk2,200 crore in June. Janata's downfall began in January this year. It incurred a huge loss of Tk1,600 crore in the first six months of this year alone. In July and August, Janata Bank deposits also went down by Tk2,612 crore.