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BB’s 11 instructions to Basic Bank

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Staff Reporter

Bangladesh Bank has given 11instructions to the Basic Bank to help it recovery from the collapse caused by irregularities unearthed by the central bank.

The state-owned Basic Bank suffered a jolt as central bank investigation found that about Tk,500 crore was misappropriated through corruption and unfair practices in lending, mainly through its three branches at Motijheel, Gulshan, Dilkusha and Shantinagar.

According to sources at the Bangladesh Bank, the main aspects of 11-point instructions include taking measures reducing its non-performing loan (NPL), strictly maintaining the central bank’s guideline in issuing any new loans, taking steps for realizing default loans and reducing its unnecessary expenditures.

Without giving any detail, a top official of the Bangladesh Bank informed that these instructions were given to the Basic Bank management after removal of its managing director and appointment of the new chairman.

“The central bank has asked the Basic Bank management and also the board of the bank to submit its progress report every three months regarding the implementation of the instructions,” said the official.

The Bangladesh Bank on May 25 removed the Basic Bank’s managing director Kazi Faqurul Islam on charges of irregularities and corruption. The bank’s another official Fazlus Sobhan was made acting managing director.

Subsequently, Basic Bank’s chairman Sheikh Abdul Hye Bachchu resigned from the Bank and the government appointed Alauddin A Majid as new chairman and also restructured the board of the bank through removing some of its directors.

The new chairman of the bank and its acting chairman last week met with the Bangladesh Bank governor Dr. Atiur Rahman.

The central bank governor asked the new chairman and acting managing director of the Basic Bank to restore discipline in the bank.

Emphasising on restoring discipline in the banking business, the governor said regaining the confidence of its clients has been the top priority of the bank.

A Finance Ministry report submitted to the parliamentary standing committee on the ministry showed that deposit at Basic Bank has declined by Tk 997.56 crore in the first six months of this year after Bangladesh Bank had detected he irregularities at the bank.