The central bank has removed NRB Commercial (NRBC) Bank’s Managing Director (MD) Dewan Mujibur Rahman on Wednesday after 10 allegations of corruption and irregularities were proven against him.
He has also been banned in the sector for two years, which means he will not be allowed to join any bank or financial institution during this period, Bangladesh Bank’s spokesperson Subhankar Saha told the Dhaka Tribune.
“Bangladesh Bank sacked Dewan Mujibur Rahman on 10 charges, including signature forgery, interference of outsiders in the board and corruption,” he said. “A letter to remove him was sent to the NRB Commercial Bank on Wednesday.”
The central bank earlier served a show-cause notice to Dewan citing 10 irregularities:
a) Forging signatures of the bank’s directors Kamrun Nahar Sathi, ABM Abdul Mannan, Firoz Haidar Khan and Md Amir Hossain when they were abroad and present documents with their signatures at the board and EC meeting.
b) Bangladesh Bank’s directives were ignored when appointing alternative directors on behalf of 10 directors. Documents relating to the main directors going abroad and returning home were not preserved in bank documents although there is an obligation to do so. Moreover, the bank ignored Bangladesh Bank’s repeated orders to send these documents to the central bank.
c) Kamrun Nahar Sathi was appointed to the bank’s board hiding information about her being a loan defaulter. Concealing loan default information, forging signatures, not preserving documents related to the main directors’ going abroad and return are all connected.
d) The presence of Mercantile Bank director Shahidul Ahsan and an official of his company Ahsan Group in the bank’s board meeting, although the two were not members of the NRBC Bank’s board of directors.
e) The bank granted a loan of Tk140 crores to AG Agro, a concern of Shahidul’s Ahsan Group in 2013, against a collateral of Tk3.91 crores only.
f) The bank approved a combined loan amounting to Tk19 crores against an application by Begumganj Feed Mills, another concern of Ahsan Group, without the consent of bank’s local branch.
g) The NRBC Bank put the money of its clients in danger by giving loans of Tk183 crores to the Ahsan Group, despite objections from the Bangladesh Bank, as the company spent the money for a different purpose which was not mentioned in the loan proposals. Moreover, both the granted amount of loan for the two Ahsan Group associate companies and the amount disbursed to the group are violations of Bangladesh Bank’s directives on loan disbursement ceiling for an individual client.
h) Violating the loan rescheduling regulation, the managing director single-handedly extended loan repayment time for Multiplan Development Limited, a client of the bank’s principal branch, without placing the proposal before the credit committee.
i) When First Corporation (Pvt), a client of the bank’s principal branch, failed to repay loan, the MD single-handedly extended the repayment time without loan rescheduling and taking any steps for recovering the loan. He also did not present the matter before the credit committee.
j) Dewan illegally granted a Tk3.78 crores loan for M/S Goldbug, a client of its Dhanmondi branch, for delivering a shipping document. He, using the MD’s sole authority, also granted Tk1.69 crore special LTR and Tk31 lakhs special term loan for delivering another shipping document without checking updated CIB report of the company and presenting the matters before the executive committee meeting.
The bank’s nonperforming loans stood at Tk128 crores a year ago but it swelled to Tk194 crores at the end of third quarter this year.
“All the irregularities were inter-linked and took place with the involvement of the board and the management,” an executive director of the central bank told the Dhaka Tribune. “The liability falls on the managing director, as he never informed the Bangladesh Bank about the irregularities.”
When contacted, Dewan declined to comment.
He had joined the NRB Commercial Bank after it got licence in 2013. His tenure was renewed last year. Dewan has previously worked at the Basic Bank, Janata Bank, Karmasangsthan Bank and Mercantile Bank.
The central bank’s investigation last year revealed gross irregularities involving Tk701 crores of loans at the NRBC bank. After that, the central bank appointed an observer to the bank.
On July 17, the Banking Regulation and Policy Department of the central bank submitted a review report to a standing committee of the bank formed to look into the NRBC Bank case.
The report suggested dissolution of the board and removal of the top executive as per the banking laws.