In a blatant breach of regulatory law, many Sonali Bank branches keep seven to eight times the money permitted in their vaults and that, too, all uninsured.
The Bangladesh Bank came up with the findings after inspecting eight chest branches (treasury branches that also keep other banks' money) out of Sonali Bank's 66 such branches across the country.
“We found some of the vaults at these branches have nearly Tk 200 crore against a capacity of Tk 25 crore, which is very risky for a bank,” said a BB official involved with the inspection done between January and February.

The inspection also found that some of these branches maintain locker facilities inside the vaults, exposing them to robberies as any locker user can take a chance.
A principal officer of Sonali Bank's Bogra Corporate Branch said branches in upazilas and rural areas were not permitted to reserve over Tk 15 lakh in their vaults. But due to the shortage of vehicles, small branches often cannot send the additional amount to the secured vault at the district branch.
While the state-run Sonali Bank has shown sheer negligence in insuring the money in its vaults, private banks fully comply with the central bank's regulations.

“Each and every vault [of private banks] is covered by insurance,” Anis A Khan, managing director of Mutual Trust Bank, told The Daily Star.
In recent months, Sonali Bank has become the ultimate target of theft and robbery.
On Friday night, miscreants stole Tk 30 lakh from its Adamdighi branch in Bogra. On January 26, the bank witnessed a heist of Tk 16.4 crore from the vault of Rathkhola branch in Kishoreganj. Earlier in 1994, Tk 10 lakh was robbed from one of its Kishoreganj branches.
The bank is also riddled with financial scams, the biggest one being the Tk 2,686 crore swindled out of its Ruposhi Bangla Hotel branch in the capital by Hall-Mark between 2010 and 2012. Five other companies took away Tk 1,000 crore during the same period.In September last year, its corporate branch at Shilpa Bhaban lost $250,000 (Tk 2 crore) to London-based cyber crooks, who allegedly hacked into the bank's security system and transferred the money to an account in Turkey.
Talking to reporters at his office in the capital yesterday, Sonali Bank Managing Director Pradip Kumar Dutta said, “We have taken a series of measures to reduce risks of robbery or heist at our branches.” 
As part of the move, 61 inspection teams have been formed at the bank's 61 regional offices to assess the situation, including security issues.
“Ten-inch walls and floors will be built at the branches that are deemed risky by the inspection teams," he said, adding that branches that are on ground floors would be shifted to upper floors.
Contacted, a top BB official said Sonali Bank had been showing "utter negligence" in safeguarding depositors' money.
“The bank doesn't insure the money in its vaults, saying it costs additional money,” the official told this correspondent last night.
He said the central bank recently wrote to the finance ministry, asking it to take immediate action against the Sonali Bank management.
Talking to BBC Bangla, BB Deputy Governor SK Sur Chowdhury yesterday said they had asked all the banks to ensure the safety of depositors' money.
“Things are happening due to banks' failure,” he added.
Meanwhile, police yesterday detained six more people in connection with the heist on Friday when Tk 30.8 lakh was looted from the Adamdighi branch through a 30 feet long tunnel being dug from a nearby furniture shop. The perpetrators used blow torches to break open the locker in the vault.
So far, 10 people have been caught in this connection.
They are furniture shop owner Ashraful Islam, his employee Shaheen Mia, carpenters Nazrul Islam, Shafiqul Islam, Mridul Mia, Abdul Wahed, welder Abdul Latif, two Ansar members in charge of the bank's security Purna Dev Sarkar and Milon Mia and former security guard Ruhul Amin.
Amin quit his job on February 28 citing personal reasons, said Shamsuddin Sharif, manager of the branch.
Police were yet to recover the money.
Sonali Bank and Bangladesh Bank have formed two committees to probe the heist.

News:The Daily Star/10-Mar-2014

Sarwar A Chowdhury

Listed banks are demonstrating a mixed trend in dividends declared for 2013.
Of the 30 listed banks, 10 have so far distributed profits to the shareholders; four banks declared higher dividends than last year, two have declared lower dividends, while four have given the same dividends as last year, according to data from Dhaka Stock Exchange.
Although 2013 was a tough year for banks as business activities were hampered by political unrest, the central bank's move to relax loan rules at the end of the year helped them recover losses, a banker said yesterday.
In a notice on December 23, Bangladesh Bank suggested lenders reconsider loan rescheduling and down payments until June this year on a case-by-case basis for borrowers in all sectors affected by political instability.
“The banks benefitted from the central bank's move. And so, there was a big shift in the fourth quarter than the previous ones,” said Mohammad Mamdudur Rashid, deputy managing director of Brac Bank, which announced higher dividends.
Overall, banks that saw better income than the previous year are giving higher dividends for 2013, he added.
“In our case, our local loan business was almost similar to the previous year, but our offshore banking business was good.”
However, banking share prices fell on the trading board last week and continued the fall yesterday, as corporate declarations from the sector could not fulfill retail investors' expectations.
Banking shares fell by 3.16 percent last week on the premier bourse, disappointing investors the most. It declined 1.67 percent yesterday.

News:The Daily Star/10-Mar-2014

Rejaul Karim Byron

State banks that had huge deficits earlier now enjoy surplus capital as the government has injected fresh funds into the banks and improved their asset quality.
Four state-owned banks had a surplus capital of Tk 855 crore on December 31, 2013, though they had a deficit of Tk 8,863 crore on September 30, according to central bank statistics.
On December 31, the banks' requirement for total capital was Tk 10,554 crore against their risk weighted assets, but they maintained a capital of Tk 11,409 crore.
Their capital became surplus as the government injected money into the banks, an official of a state bank said.
The government provided the banks with Tk 4,100 crore in early December to help them meet their capital shortfall in line with conditions tagged by the International Monetary Fund with its loans under Extended Credit Facility.
Pradip Kumar Dutta, managing director of Sonali Bank, said they got Tk 1,995 crore to strengthen their capital base. Sonali also got some of its big loans rated which eased its capital requirement, Dutta said.
He also said they recovered a higher amount of classified loans in 2013 which has brought down their default loans and provisioning as well.
SM Aminur Rahman, managing director of Janata Bank, said, apart from getting money from the government they made a Tk 1,600 crore operating profit in 2013 which helped them meet their capital shortfall.
Rahman said they have brought down their classified loans to about 10 percent of their total outstanding loans, from 17 percent earlier.
 The state banks' default loans rose to more than Tk 24,000 crore in the third quarter last year due to political unrest, irregularities in granting loans in 2012, and new loan classification rules of the central bank.
In early December last year, Bangladesh Bank instructed the banks to relax their loan rescheduling rules to provide some relief to the borrowers affected by political turmoil. The banks took advantage of the scope and reined in their classified loans.
In the last quarter of 2013, the state banks brought down their default loans by around Tk 8,000 crore. Though the banks had a provision shortfall of around Tk 500 crore against their default loans in September, the amount became a Tk 1,500 crore surplus in December.
Sonali Bank's cash recovery against its default loans was 272 percent in 2013 and that of Janata Bank 186 percent compared to those in 2012.
However, officials at the state banks said if the rescheduled loans are not monitored properly, the amount of default loans may increase again.
Dutta of Sonali Bank said they got the capital from the government against a business plan and they have started working to improve their capital situation.
The Janata Bank's MD said, “With the public fund we received we could create assets which will ultimately strengthen the bank's financial health further.”

News:The Daily Star/10-Mar-2014

AKM Shafiqur Rahman has been appointed managing director of National Bank, the bank said in a statement yesterday.
Prior to his appointment, he served as additional managing director of the bank. Rahman started his career as with Bangladesh Krishi Bank in 1974.
He holds a master's degree in economics and also completed a certificate course on “Programme on Investment Appraisal and Management” from Harvard University, USA.

News:The Daily Star/10-Mar-2014

A meeting of the Shari`ah Supervisory Committee of Islami Bank Bangladesh Limited (IBBL) was held at the Islami Bank Tower in Dhaka on Saturday.

Mufti Sayeed Ahmad, Vice-Chairman of the committee and Head Mufti of Al Jamiatus Siddikiah Darul Ulum (Madrasha-e-Furfura Sharif) presided over the meeting, said a press release.

Nurul Islam Khalifa, Deputy Managing Director, Md. Nazrul Islam Khan and Md. Shamsul Huda, Executive Vice Presidents of the bank also attended the meeting.

News:Daily Sun/10-Mar-2014