Bangladesh Bank has imposed a restriction on three branches of BASIC Bank in Dhaka to sanction new loans considering the recent credit scam in the braches.
The central bank took the decision at a meeting yesterday, with Governor Atiur Rahman in the chair.
The decision emerged on the day after the removal of the state-owned bank’s Managing Director Kazi Faqurul Islam on Sunday due to irregularities and corruption in the banks.
Bangladesh Bank also asked the bank yesterday to appoint a new managing director (current charge) within a day through following the rules. Following the instruction, BASIC Bank board called an emergency meeting on the day and appointed its deputy managing director-1 Fazlus Sobhan as MD in-charge.
New loan disbursement activities by the bank’s Gulshan, Dilkhusha and Shantinagar branches have been suspended in the awake of massive irregularities, said Bangladesh Bank Executive Director Mahfuzur Rahman.
A letter has been served to the bank yesterday, asking suspension of the lending.
It also asked the branches to take permission of the EC committee before disbursement of the loans already granted.
The central bank also warned the bank of similar consequence for its other branches if it finds any irregularities in lending.
Of the total 68 branches of the bank, the suspended three branches hold 61% loans of the total outstanding, according to Bangladesh Bank data.
The amount of total disbursed loan of BASIC Bank stood at Tk11,180 crore in March this year, of which Tk6,900 crore has been disbursed through the three branches.
BB inspections found last year that the bank approved loans of Tk4,500 crore, mostly without proper documentation and scrutiny.
Most of the irregularities took place in BASIC Bank’s four branches — Motijheel, Shantinagar, Dilkusha and Gulshan — that granted loans of about Tk4,425 crore between December 2009 and November 2012 on poor documents and inflated mortgages.
