Crackers broke into the Sonali Bank computer network and transferred at least $250,000 in the middle of 2013, a senior official said on Sunday.

M Aslam Alam, secretary (bank and financial institutions division) of the the finance ministry, divulged the scam in the presence of the finance minister, Abul Maal Abdul Muhith at the bank’s annual conference at the Sonargaon Hotel.

Aslam identified loopholes in the bank’s risk management system. ‘The bank has various risk factors which need to be properly identified and resolved.’

He said the looting of money from the bank’s Kishoreganj branch by digging a tunnel, breaking the password and loss of $0.25 million of the bank and inoperative closed circuit television cameras in the head office were all related to the risk management inefficiency.

Aslam criticized the bank’s business model by saying that ‘historically, Sonali Bank provided loans for corporate houses most of whom have became defaulters. The bank should change its business model and provide loans for small and medium enterprise across the country.’ 

He said that bank executives were enthusiastic about collecting deposits but were reluctant to disburse loans. ‘Such an attitude resulted in a negative loan and advance performance and a poor performance in earning operating profit in 2013,’ he said.

Aslam’s statement followed a series of fund embezzlement scams, including the one involving Hallmark loan.
Muhith said that the Sonali Bank loan scam incidents in 2012 had happened for lack of efficiency in internal control system of the bank.

‘To increase customer confidence in the bank the bank, the management should concentrate on increasing its internal control system,’ the minister said.

Muhith warned of the hassle of online banking saying that the bank should be aware of technical glitches of online banking.

The finance minister expressed his satisfaction about the banking sector performance saying that ‘the banking sector now stands on a strong footing with satisfactory expansion.’

The Sonali Bank board of directors chairman, AHM Habibur Rahman, presided over the conference where the bank’s managing director Pradip Kumar Dutta spoke.

The secretary identified the introduction of core banking as a serious challenge for the bank.

He said that risk management was not only a theoretical issue. ‘it is very much a practical one.’

Habibur Rahman admitted that the bank have the faults that the secretary identified and said the bank would now focus on SME.

He said that the Hallmark scam had happened because of the involvement of some unscrupulous bank officials.

He said that the bank had come out from the image crisis it suffered because of the Hallmark scam and it was giving priority to the recovery of defaulted loans and further business development.

The managing director gave picture of the bank’s performance in 2013 at the conference.