The board of directors of state-owned Sonali Bank Limited yesterday decided to issue show-cause notices on its 32 officials accused of being involved in the Hallmark loan scam.

A former managing director and two incumbent deputy managing directors of the bank will also have to face the music for their roles in the scam as found by a functional audit report.

Sonali Bank will also inform the finance ministry of the matter, as the board of directors does not have the authority to punish its MD and DMDs but the ministry has.

The decisions came at a board meeting held at the bank's head office in the capital's Motijheel area. Quazi Baharul Islam, chairman of the bank, presided over the meeting.

“The meeting unanimously agreed to show zero tolerance on the scam,” said a board member, adding that the bank would suspend the officials accused if their explanations were not satisfactory.

In June, Sonali Bank appointed Syful Shamsul Alam and Co, a chartered accountant and consultancy firm, to prepare a functional audit report and find out those responsible for the irregularities.

The firm submitted its report and forwarded a copy of the report to the central bank last week.

According to the report, as of May 31 this year, the Ruposhi Bangla Hotel-branch of the bank had disbursed Tk 3,606 crore as loan to Hallmark Group and other entities without maintaining banking rules.

It found various officials of the bank responsible for the scam. It said the top management of the bank had remained “mysteriously silent for a year”, since February 2011, although the signs of irregularities in the branch came to light through various internal inspections.

In May, a central bank investigation also revealed massive irregularities by the bank in sanctioning and disbursing of loans, especially to little-known Hallmark Group and others, and instructed it to take necessary actions.

News: The Daily Star/Bangladesh/24-Aug-12