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Sunday, 26 March 2023
Irregularities in National Bank BB stops loan disbursement of more than Tk 10 cr

Irregularities in National Bank BB stops loan disbursement of more than Tk 10 cr

Staff Correspondent

To prevent irregularities in loan disbursements, Bangladesh Bank ( BB) has stopped the disbursement of loans of more than Tk 10 crore from the private sector National Bank.

Besides, the central bank has informed that old loans cannot be renewed without cash collection. Besides, there is a ban on opening any loan without depositing 100% cash. Bangladesh Bank has sent a letter to the bank with this instruction recently .

Bangladesh Bank said that this instruction has been given to protect the interest of the bank's depositors. However, such directives of the central bank are not new in the case of the National Bank. Earlier, the central bank had stopped the loan disbursement of the bank. The restrictions were later relaxed under pressure from a top client of the private sector bank.

The bank's managing director Mehmud Hossain resigned last Wednesday under the pressure of the board. In such a situation, the central bank again imposed some restrictions.

When asked, central bank spokesperson Majbaul Haque told this correspondent that the MD of National Bank has resigned. For this reason, the supervision has been increased in the bank. Large loans have been ordered to be closed. Besides, some other instructions have been given.

According to Bangladesh Bank's letter, no loan can be given except agriculture, working capital, SME and consumer loans and disbursement of loans under Bangladesh Bank's refinancing facility up to a maximum of Tk 10 crore. Besides, to open the loan, the full amount must be deposited from the customer first.

The letter also said that disbursement of more than 10 crore rupees of previously approved loan amount should be approved by Central Bank. The loan cannot be renewed without cash recovery of the previous loan dues. The letter also mentions that no loan from another bank can be acquired.

The central bank is trying to bring this private sector bank back to normal through this latest step. Earlier, as a last resort, Bangladesh Bank had taken the same initiative in the case of Basic Bank and former Farmers (now Padma) Bank. But in the end, the bank was not completely spared from the two disasters. Now the same step has been taken in the case of National Bank.

The top officials of the National Bank have confirmed that they have received the instructions from the central bank.

Mehmud Hossain's resignation

Mehmud Hossain, Managing Director (MD) of National Bank left the bank on last Wednesday citing 'personal reasons'. He did not go to the bank again on Thursday. His tenure as MD was till December 8.

A few sources in the banking sector confirmed to this correspondent that Mehmood Hossain was forced to resign despite citing 'personal reasons' in the resignation letter.

Last Monday evening, he was called to Sikdar House on Road No. 11 in Banani. He then decided to resign. Before National Bank, Mehmood Hossain was the MD of NRB Bank and Bank Asia. Earlier, four MDs had to leave the bank before the end of their tenure in six years.

Deputy Managing Director (DMD) Syed Rais Uddin of the bank has been given the charge of Acting MD as Mehmud Hossain resigned.

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