Monirul Alam

The management of state-run Sonali Bank did not act on a warning from Bangladesh Bank (BB) in mid-2010 regarding abnormal ceiling of loan disbursement to Hallmark Group, BB sources said.

During an inspection in June-July period of 2010, a BB team found that the Ruposhi Bangla branch of Sonali Bank had been preparing to provide a loan of Tk 3.5 billion to Hallmark Group against LC bills for import of raw materials for one of its readymade garment unit.

“The branch officials couldn’t justify the loan. Immediately after the matter was detected, we issued an early warning. But, neither the bank board nor its management reported us anything about the matter,” said a member of inspection team, seeking anonymity.

While Commenting on the issue, a BB high official said the central bank has always been alert against abnormal credit growth in different branches of schedule banks and finally detected the single-highest loan-forgery at Sonali Bank and found the bank’s board accountable during a regular inspection in last May.

“But, by this time, huge amount of loans have already been disbursed to the firm (Hallmark group). Most of the loans were disbursed between December 2011 to March 2012,” said the official.

A total of Tk 35.47 billion has been lent illegally to little-known Hallmark Group through different branches of Sonali Bank, the BB inspection found, which was confirmed later in a functional audit by an independent audit firm.

As per the rules of business and BB guidelines, any big loan must be approved by the board of directors of the respective bank. Thus, the Sonali Bank’s board cannot deny the responsibility of disbursing such a huge amount of loan to Hallmark Group, said the sources.

After the loan-forgery prompted a wave of criticism on Sonali Bank top brass, some of the members of the bank’s board of directors claimed that the issues were not brought to the notice of the incumbent board by the previous managing director.

“Such a loan-forgery could have been checked if the previous managing director (Humayun Kabir) would brought the issue to the notice of the board,” the board’s audit committee chairman KM Zaman told reporters at a press conference last Thursday.

Km Zaman denied his responsibility when reporters asked him why the accounts of Rupashi Bangla branch of his bank was not audited.

According to banking rules, every branch must be audited twice every year.

News: Daily Sun/Bangladesh/03-Sep-12