The Bangladesh central bank has issued show-cause notices to NRB Commercial Bank Ltd.'s chairman and CEO on irregularities, including the forging of signatures of four absent bank directors, The Daily Star reported March 30.
Bangladesh Bank asked Dewan Mujibur Rahman, NRB Commercial Bank's CEO and managing director, to respond to queries on why the board failed to protect the interests of depositors and the public in light of the forgery incident. Rahman has 10 days to respond on why he should not be removed from his post.
Rahman failed to discharge his responsibilities properly and did not inform the central bank of irregularities at the bank, according to a letter dated March 20 and obtained by The Daily Star. In another letter sent to NRB Commercial Bank Chairman Farasath Ali, the central bank took to task the bank's board, saying the blame falls on them for the forgery.
The incident cited by the central bank involves the forging of the signatures of four absent bank directors — Kamrun Nahar Sakhi, ABM Abdul Mannan, Feroz Haider Khan and Md Amir Hossain — to say they were present during board meetings. The forging of signatures of absent board members is fraud and is punishable by law.
Other irregularities that the central bank noted included allowing Mercantile Bank Ltd. Chairman Md. Shahidul Ahsan and officials of his company, Ahsan Group, to join the board meetings of NRB Commercial Bank even though they were not directors. The bank also did not follow rules on the appointment of alternative directors during a board meeting on Aug. 24, 2014.
The bank was also cited for disbursing loans to companies that did not have adequate collateral. In one instance, the bank board approved a 1.4 billion Bangladeshi taka loan for AG Agro on May 8, 2013, with only a 39.1 million taka collateral. The central bank advised the bank to bring down the loan amount, which was subsequently disregarded by the board. The bank then raised the loan amount to 1.83 billion taka in May 2016, placing the bank at risk. Shafiqul Islam, a director at AG Agro, and Golam Farouque, an adviser for the group, are alternate directors of NRB Commercial Bank.
Bangladesh Bank Deputy Governor SK Sur Chowdhury said the central bank may take legal action against NRB Commercial Bank if it finds the replies from the bank's chairman and CEO unsatisfactory.
Rahman and Ali declined to comment on the matter, the publication reported.
As of March 31, US$1 was equivalent to 80.22 Bangladeshi taka.