Bangladesh Bank on Monday imposed temporary embargo on three branches of state-

owned BASIC Bank in sanctioning fresh loans after huge irregularities were found in those branches. The irregularities in the Gulshan, Shantinagar and Dilkusha branches already led to removal of the bank’s managing director Faqurul Islam by the central bank on Sunday. The BB in a letter to the acting managing director and chief executive officer of the bank asked not to sanction any fresh loan from the three branches until further notice. The bank’s board of directors gave deputy managing director Fazlus Sobhan additional charge of MD and CEO on Monday. The BASIC Bank scam came to the fore early in 2013 after the BB detected massive irregularities in giving loans. The central bank inspection teams found that the Shantinagar, Dilkusha and Gulshan branches of the state-owned bank gave around Tk 4,000 crore in loans between December 2009 and 2013, mostly by violating banking norms and rules. The BB letter also said that the central bank would take same measures against other branches of the bank if it unearthed similar irregularities. It said that the three branches would have to take approval from the executive committee of the BASIC Bank board to disburse loans which were sanctioned earlier before issuing the central bank letter. The EC committee of the board will give approval to disburse the loan if the concerned clients followed the compliance accurately, the BB letter said. According to the BB inspection reports, the three branches of BASIC Bank gave significant amount of loans to nonexistent companies and approved loans instantly after the clients had opened accounts. Moreover, the bank’s board sanctioned loans even before the branch sent the loan proposal to its headquarters. Of the amount, Tk 1,800 crore was given by the Gulshan branch, and most of the loans were issued without proper scrutiny. The Gulshan branch issued loans of Tk 45 crore to AB Trade Link and another Tk 112 crore to Ma Tex, EFS Enterprise and SPN Enterprise. All the four organisations are nonexistent. The BB inspection reports showed that the amount of loan disbursement at Shantinagar and Dilkusha branches had stood at Tk 1,524 crore and Tk 923.21 crore respectively between 2012 and 2011. Most of the loans of the two branches were disbursed violating the rules and regulation. RK Food Ltd and Nimex Ltd received significant amount of loans from Dilkusha branch without submitting proper documents. The three branches of the bank also sanctioned and disbursed loans in 2013 violating the central bank’s rules and regulations, according to a recent BB report. The Shantinagar branch disbursed Tk 36 crore to Hasib Enterprise and Tk 45 crore to SOS Brothers in early 2013 violating the rules and regulations.