Bangladesh Bank (BB)'s Department of Financial Institutions and Markets (DFIM) has hit an impasse, as a major shuffle in its workforce has led to a massive decrease in the department's productivity.
This stemmed from the various actions taken by its former executive director and division head, Md Shah Alam, who was unceremoniously removed after his name was associated with rogue banker Proshanta Kumar Halder, responsible for defrauding a host of non-bank financial institutions of at least Tk3,500 crore.
Shah Alam was the chief of the branch of the central bank responsible for keeping watch on the non-bank financial institutions (NBFIs.)
However, he had allegedly teamed up Halder so that all the irregularities and corruption that the latter was indulging in flew under the radar of the regulator.
Alam’s involvement came to the surface after Rashedul Haque, a close aide of Halder and a former managing director of the International Leasing and Financial Services (ILFSL), one of the NBFIs from where a large sum was siphoned off, made a confessional statement before a Dhaka court on February 2.
On January 24, the Anti-Corruption Commission (ACC) arrested Haque, an accused in five cases of fraud connected to ILFSL.
Alam and the BB former deputy governor SK Sur Chowdhury were on the payroll of Halder, both of whom helped to hide the irregularities and corruption at ILFSL, Peoples’ Leasing and Financial Services, Reliance Finance and FAS Finance and Investment, as per Haque’s confessional statement.
It was during Alam’s tenure as the chief of the DFIM since December 2017 that the health of about one-third of the 33 NBFIs had gone south, insiders said.
As a result of all this, senior officials are said to be waiting for instructions from the topmost officials.
Former governor of Bangladesh Bank Salehuddin Ahmed said that as a regulator, Bangladesh Bank can take some decisions, but they do not take them, reports Bangla Tribune.
According to him, central bank officials should be given the opportunity to work without any tension, which would be good for the economy.
Sources at the central bank, requesting anonymity, said that officers are not working with the same responsibilities as before, or are not able to work.
“Everyone is waiting for instructions from above,” they also said.
If any decision is required regarding the management of banks or its loan classifications, then the central bank usually issues a circular from the Banking Regulation and Policy Division (BRPD).
After that, the DFIM would issue similar circulars for NBFIs.
For example, last year the BRPD issued three separate circulars exempting banks' customers from repaying loans.
Similarly, circulars were also issued by the DFIM within a day or two of the BRPD circular.
On March 24 this year, even though the BRPD issued another loan classification circular, the DFIM has not been able to issue a similar circular to date.
At present, the Financial Institutions Department has General Manager Zulkar Nain, Executive Director Humayun Kabir and Deputy Governor Ahmed Jamal.
In this regard, the Deputy Governor of Bangladesh Bank Ahmed Jamal on Monday said: "We are working to provide similar benefits to the customers of NBFIs. It is hoped that a circular in this regard will be issued in a day or two."
Spokesperson and executive director of Bangladesh Bank Mohammad Sirajul Islam said on Sunday: "As far as I know, the DFIM works to provide facilities to the customers of NBFIs like the banks."
He mentioned that it is not possible to say when the circular will be issued. However, he said he would discuss the issue at the highest level of the central bank.
At present, there are 33 NBFIs operating in the country.