Marauders on the prowl
A number of forgeries has been detected in the disbursement of a huge amount of loans by the Dilkusha branch of the BASIC Bank in the first half of this year. The bank disbursed Tk. 1,316 crore in loans to its clients till June.
Despite being hit by a huge scam related to disbursal of loans over the last couple of years, depositors’ money from the bank continued to be plundered. Loans worth Tk. 25 crore were disbursed in the first six months of this year, with the Dilkusha branch flouting banking rules with impunity.
Most of the loans were distributed without proper credit assessment and, in some cases, large-scale cheating was conducted during disbursal of loans, an inspection by the central bank revealed. A good number of loans had been cleared without visiting the businesses and without collecting Credit Information Bureau (CIB) reports of many customers. Some loans were approved in undue haste. Loans were even disbursed to fake companies.
The companies which benefited from the loan irregularities are Venerable Export Industries Ltd, Prime Jute Industries Ltd, Nova Auto Bricks, Phoenix Hatchery Ltd, Sohel Enterprise, Reliance Shipping Lines, Dav Enterprise, Apollo Engineering and Construction Ltd, and Oil Tex Ltd.
The Dilkusha branch disbursed a Tk. 2 crore CC loan to M/S Venerable Export Industries Ltd against mortgage of its property on December 30, 2013. The amount was disbursed in a single pay order, but since then, no transaction was found in that account.
The investigation also found that the branch manager influenced the credit officers to disburse a Tk. 7-crore term loan on April 22 this year to the company, despite objections from the bank’s legal officer. The legal department, in its objection, noted that the property which was mortgaged by the company was not sufficient for availing the loan.
Again, by providing a loan to Prime Jute Industries Ltd despite objections from the bank’s legal team, the bank incurred a loss of Tk. 8.3 crore.
The Dilkusha branch manager also ordered disbursement of Tk. 52-lakh credit in favour of two sister concerns of Prime, without approval from the bank’s head office.
In April this year, Nova Auto Bricks, which had a classified loan of Tk. 35.6 crore with the bank, was given a fresh loan of nearly Tk. 1 crore in clear violation of the Bank Company Act, 1991. After getting the loan, the company did not make any transaction in its account.
Phoenix Hatchery Ltd has a classified loan with the bank, amounting to Tk. 10 crore. Even then, the company was given a term loan of Tk. 3.10 crore in February in violation of banking rules.
The bank provided a Tk. 4-crore loan to Sohel Enterprise even though it knew that the company already had a Tk. 16-crore bad loan with the bank.
Swindling turned into an art in the case of Reliance Shipping, which was given a Tk. 16-crore loan against the purchase of three vessels from Belayet Navigation owned by Gazi Belayet Hossain, general secretary of Bangladesh Cargo Vessel Owners’ Association.
However, during the inspection, the central bank found no existence of Reliance Shipping, and concluded that a fake company had been created to loot the amount from the bank. The total outstanding on the Reliance account stands at Tk. 21.32 crore now.
“It is most surprising that the loan file is not available in the bank’s custody,” said the Bangladesh Bank (BB) report. According to the BB team, the customer, along with the branch manager and credit officials, forged the entire loan amount.
The Dilkusha branch approved a CC loan for Tk. 3.5 crore in favour of M/S Dav Enterprise on October 19, 2011. Within four months of the CC loan approval, the bank increased the CC loan limit to Tk. 13.50 crore without any specific reason. The current outstanding of the company is Tk. 16.11 crore. The BB team found irregularities in the disbursal of the loan as it was approved despite objections from the legal department.
M/S Apollo Engineering and Construction Ltd opened 12 L/Cs and 23 STL. The company’s total outstanding is now Tk. 51.57 crore. On December 30, 2012, without any strong reason in favour of the customer, the bank authorities enhanced the time limit of the payment. The BB inspection team criticised the board for enhancing the time limit for the company.
Oil Tex Ltd and its subsidiaries have an outstanding loan of Tk. 181.30 crore with the Dilkusha branch and Tk. 46.63 crore of it is classified. Despite being a classified borrower, a Tk. 6.20-crore loan was given to the company this year, in clear violation of banking rules.
Pubali aims for paperless, faster banking
Helal Ahmed Chowdhury, managing director of Pubali Bank, speaks at the inauguration of a daylong workshop on ethical banking at The Daily Star Centre in Dhaka yesterday.
Pubali Bank aims to expand its online banking and introduce new products to meet growing demand and become more competitive.
The largest private bank is also set to launch its mobile banking service, Pubali Cash, in a couple of months to serve unbanked people.
The bank that has already automated its 425 branches is also working on introducing its first credit card next month.
“We are focusing on paperless banking in a bid to render faster services to clients,” said Helal Ahmed Chowdhury, managing director of the bank, adding the bank will recruit about 550 employees this year.
Chowdhury spoke at the inauguration of a daylong workshop on ethical banking at The Daily Star Centre in Dhaka yesterday, with around 70 officials of the bank's 19 branches located in Old Dhaka.
Pubali plans to double the number of ATM booths to 200 this year and take the figure to 1,000 in next eight years to establish its own network across the country, said Safiul Alam Khan Chowdhury, deputy managing director of the bank.
On mobile banking, he said Pubali has already completed all the procedures to launch the service. “We are waiting for appropriate time to begin the operation.”
Pubali Cash will provide mobile financial services similar to other operators. It includes cash in and out and payments to multiple recipients
Average daily transactions by mobile rose 117 percent year-on-year to Tk 263 crore in March, according to Bangladesh Bank data.
At last count in March, the country had more than 1.50 crore mobile banking subscribers, up 2.77 percent from the previous month.
The bank, which has so far employed nearly 7,500 people, aims to open eight new branches this year, the deputy managing director said. “We are planning to open more branches to serve more people with ethical banking.”
Pubali Bank arranged the workshop for the officials of the bank's Dhaka South region to educate them on ethical banking, environmental risk management, green banking, anti-money laundering and foreign remittance.
“This region has 19 branches which are highly profitable due to huge business potential,” said M Shahnawaz Chowdhury, general manager and head of region of the bank.
At the end of June 2014, the bank's outstanding loans stood at Tk 13,398 crore, of which 6.09 percent came from Dhaka South zone, he said.
The bank's Dhaka South zone also contributes nearly 5 percent of bank's total deposits of around Tk 20,000 crore, said the region head.
Pubali Bank, which has now around 9 lakh active account holders, has recently reduced the interest rates on its commercial loans by 1.5 percentage points to 15 percent to encourage industrial expansion and economic development.
The bank has also introduced an SMS-based banking service to provide information to its customers round the clock.
The SMS service includes transaction notifications, loan sanctions and disbursements, L/C openings and payments, card activations/deactivations, monthly balance notifications, ATM transaction and internet banking access.
Meanwhile, the bank has also started recruiting physically challenged people. “From now on we will hire at least 2 such people each year as part of our corporate social responsibility” Chowdhury, the bank's DMD, said.
Bangalee entrepreneurs established Pubali Bank in 1959 in the then East Pakistan. After independence in 1971, like others, the bank was taken over by the government. In the early 1980s, the bank was again handed over to the private sector.
Pubali Bank set a target to disburse Tk 254 crore in farm credit this fiscal year, as compared to Tk 225 crore a year ago.
The bank's operating profit rose to Tk 340 crore during January-June, up from Tk 323 crore compared to the same time last year, according to the DMD.
Non-performing loans of the bank have now come down to around 5 percent from 18.40 percent in 2004, he added.
MA Halim Chowdhury, additional managing director of the bank, also attended the event.
Islami Bank holds business dev confce
Engr. Mustafa Anwar, Vice Chairman, Islami Bank Bangladesh Limited, is seen at the Business Development Conference of Bogra, Rajshahi and Rangpur zones of the bank in Bogra on Saturday.
Engr Mustafa Anwar, Vice Chairman of the bank was present in the conference as chief guest, said a press release.
Mohammad Abdul Mannan, Managing Director of the bank presided over the conference.
Md. Habibur Rahman Bhuiyan, FCA, Deputy Managing Director and Head of Internal Control and Compliance Wing, Md. Shamsuzzaman, Executive Vice President and Engr. Mohammad Ali, Head of Assets Management Division attended.
SIBL organises business review meeting
Social Islami Bank Limited (SIBL) organised “Strategic Planning Session and Managers’ Half-Yearly Business Review Meeting” at its corporate office in Dhaka on Saturday.
Major (Retd) Dr. Md. Rezaul Haque, Chairman of the bank was present at the meeting as the chief guest, said a press release.
Md. Anisul Hoque, Abdul Mohit and Abdur Razzaque, Directors, and Md. Abdur Rahman, Chairman of Board Audit Committee and Director of the bank were present.
BB gives 11-pt instructions to Basic Bank as recovery plan
Bangladesh Bank has given 11 instructions 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. —UNB