The scam–hit Basic Bank could not trace yet its 14 clients who owe Tk563 crore to the bank.
The bank did not follow regulations like Know-Your-Customer (KYC) before issuing loans either.
Managing Director Khondokar Md Iqbal revealed the misdeeds allegedly conducted by the previous management at a meeting of fifth parliamentary standing committee on Finance Ministry last week.
Basic Bank Chairman Abdur Razzak presided over the meeting.
According to a meeting source, the bank’s financial condition deteriorated during a period between 2010 and middle of 2013.
Massive irregularities took place in distributing loans among a number of little-known clients, it said. A total loan of Tk4,236 crore was disbursed among 335 clients.
Of them, the incumbent management has failed to trace 14 default borrowers so far.
“We have found some trace of only four of the 14 default loan customers,” a meeting source quoted Iqbal to have told the meeting.
“The then situation was such that people were collecting money and putting them into sacks at night,” the MD was quoted as saying.
The managing director also hinted that former chairman of the bank in collusion with the then board of directors gave loan to the 335 clients without proper documents, added the source.
Bank and Financial Institutions Division Secretary Dr Aslam Alam told the Dhaka Tribune the percentage of default loans of the scam-hit Basic Bank is gradually rising in line with the continued investigation on its loan distribution.
He added that now the default loan was 54% of the total loan disbursed by the bank.
“We have already deployed audit firms to find out the default loan of more than Tk1crore given to the clients between 2010 and 2013.”
The parliamentary standing committee has decided to form a separate branch to dispose of loan dispute cases of BASIC and Sonali Bank.
It has also decided to ask the Anti-Corruption Commission to take tough action against the guilty board members, chairman and MD and other staff of the bank.
The government in last July dissolved the infamous board of BASIC Bank over its role in financial irregularities that cost the state-run lender Tk4,500 crore in the last four years.
The seven-member board of BASIC (Bangladesh Small Industries and Commerce) Bank had been dismissed on the basis of the investigation report of the central bank.
Later, Bank and Financial Institutions Division appointed new chairman and MD for the bank.
