BB removes Farmers Bank MD over irregularities

Bangladesh Bank (BB) yesterday removed the managing director of Farmers Bank on charges of helping the bank’s board of directors engage in loan disbursement irregularities. Farmers Bank started its journey in 2013 as one of nine new banks that were approved through political consideration, but it quickly became embroiled in controversy. In 2014, the central bank conducted a special inspection of the fledgling bank and found a loan disbursement irregularity amounting to around Tk500 crore. On Tuesday, BB Executive Director Subhankar Saha confirmed that AKM Shameen had been dismissed on the recommendation of its standing committee, which had summoned the managing director over the charges on December 13. BB sources said Shameem was relieved from his duties after the central bank committee rejected the explanation he provided in his defence. Bangladesh Bank used the same method to remove a number of bank MDs in the past few years. On December 6 last year, NRB Commercial Bank MD Dewan Mujibur Rahman was removed from his post, while state-owned Agrani Bank Ltd MD Syed Abdul Hamid was relieved of his duties on June 30. In May 2014, the central bank dismissed Basic Bank MD Kazi Fakhrul Islam in a similar fashion. The Bangla Tribune has also learned that the Farmers Bank has failed to deposit money in Bangladesh Bank as per the regulations, due to a liquidity crisis. In addition, when Bangladesh Telecommunication Company Limited (BTCL) attempted to clear their account in Farmers Bank, their cheques were dishonoured on multiple occasions. Under these circumstances, former home minister Dr Mohiuddin Khan Alamgir resigned as the bank’s chairman on November 27, a day after AKM Shameem was issued a show-cause notice by the central bank under Section 46 of the Bank Company Act. Chairman of the Farmers Bank audit committee, Mahabub ul Haq Chisti, also resigned around the same period. In September, 2017, the defaulted loan amount of the Farmers Bank stood at Tk377 crore, which is 7.45% of the total loans disbursed so far. The bank owes Tk134 crore from its top ten loan defaulters.This article was first published on Bangla Tribune