The Supreme Court yesterday cleared the way for Bangladesh Bank to take legal action against NRB Commercial Bank's chairman and managing director for failing to protect the interest of its depositors and shareholders.

The apex court scrapped a High Court order that asked the authorities concerned of the central bank not to create any obstruction in discharging duties by NRB Commercial Bank's Chairman Farasath Ali and its Managing Director Dewan Mujibur Rahman.

It, however, asked the Bangladesh Bank to give the copy of its inspection report to Farasath and Mujibur in three days. A four-member bench of the Appellate Division of the SC headed by Chief Justice Surendra Kumar Sinha passed the order after hearing a petition filed by AM Tushar Iqbal Rahman, a sponsor shareholder and a former director of NRB Commercial Bank, challenging the HC order.

There is no legal bar for the Bangladesh Bank to carry out appropriate action against Farasath and Mujibur for their irregularities following the SC order, Barrister Mehedi Hasan Chowdhury, a lawyer for Tushar, told The Daily Star.

He said Bangladesh Bank on March 20 this year issued two separate show-cause notices on Farasath and Mujibur under the Bank Companies Act, saying that it has been found in the inspection that NRB Commercial Bank has failed to protect the interest of its depositors and shareholders.

In the notice issued to Farasath, the central bank asked him to show cause in 10 days why action should not be taken against the board of NRB Commercial Bank.

The central bank in another notice asked Mujibur to explain in 10 days why he should not be removed from the post of managing director of NRB Commercial bank, the lawyer said.

Following a writ petition filed by Farasath and Mujibur, the HC on March 28 ordered the authorities not to create any obstruction in discharging duties by them and issued a rule asking them to explain why they should not be directed to give the copy of inspection report to them, Barrister Chowdhury said.

He also said the SC yesterday dismissed the writ petition of Farasath and Mujibur, as writ petition is not acceptable.

Meanwhile, NRB Commercial Bank's Vice President Masum Haider, who said he was present in the court during the proceedings of the case, told The Daily Star that the SC directed BB to dispose of the letter sent by Saidur Rahman, father of Tushar Iqbal, within three weeks.

A cyber attack on Union Bank of India last July began after an employee opened an email attachment releasing malware that allowed hackers to steal the state-run bank's data, the Wall Street Journal reported on Monday.

The attempt closely resembled the cybertheft last year of more than $81 million from the Bangladesh central bank's account at the New York Federal Reserve, the paper reported.

The opening of the email attachment, which looked like it had come from India's central bank, initiated the malware that hackers used to steal Union Bank's access codes for the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a system that lenders use for international transactions.

The codes were used to send transfer instructions for about $170 million to a Union Bank account at Citigroup Inc in New York.

Union Bank had traced the money trail and blocked the movement of funds.

SWIFT late last year said that some banks using its system had been attacked after the Bangladesh heist, the Journal said, but did not specifically name Union Bank of India.

Union Bank Chairman Arun Tiwari told the newspaper that SWIFT officials had been working with the bank since the day of the cyber attack

Prime Minister Sheikh Hasina, who is the chairperson of the Executive Committee of the National Economic Council (ECNEC), has cancelled the proposed ‘Modernisation of State-owned Financial Institutions Project’ because the financial involvement of the World Bank (WB) has been envisaged.
According to sources present at the ECNEC meeting, PM Hasina postponed the project because of security concerns of the state-owned financial institutions. She said the project should be implemented with the government’s own funds and institutions concerned, as high security issues were involved.
The government has become cautious about the security of financial institutions following the cyber heist at the Bangladesh Bank (BB) in February last year.
Sheikh Hasina further directed the Economic Relations Division (ERD) to discuss with the WB the possibility of diverting this project’s funds to other areas.
Sources said the PM raised the issue when the project proposal was tabled for the ECNEC’s approval on Tuesday.
The Banks and Financial Institutions Division had taken an initiative to modernise the state-owned banks to ensure transparency and staff efficiency. It had planned to implement the measures under a project named ‘Modernisation of State-owned Financial Institutions’.
The Banks and Financial Institutions Division wanted to implement the project at a cost of Tk. 1,580 crore with financial support from the World Bank (WB) from December 2016 to December 2021. The WB was to provide Tk. 1,185 crore for the execution of the project.
According to the detailed project plan (DPP), the Banks and Financial Institutions Division was to offer consultancy to state-owned banks for a comprehensive business process reengineering (BPR), extending from internal control and accounting to the credit appraisal system, risk management, and transaction processing, the essential features of an automated modern banking environment.
According to the DPP, over the past 20 years, Bangladesh has made significant gains in economic growth, development and poverty reduction. Bangladesh’s per capita gross national income (GNI) grew more than tenfold from around USD 100 in 1972 to USD 1,465 in 2016. The average annual gross domestic product (GDP) growth rose steadily over the last three decades, and grew by more than 6 per cent a year on average during the past decade, despite the adverse impacts of the global recession.
Despite this progress, growth remains below potential and Bangladesh will need an overall annual growth of around 8 per cent for the country to achieve its ambitious target of reaching middle-income status and reducing poverty from the current 31.5 per cent to less than 15 per cent by 2021.
When asked about the 'Modernisation of State-Owned Enterprises' project, which was withdrawn from the day's meeting, planning minister AHM Mustafa Kamal said Prime Minister Sheikh Hasina was against taking help from development partners in the enhancement of the cyber security of the state-owned commercial banks and other financial institutions.
Bangladesh will need to develop a financial sector that is stable, inclusive, and capable of providing efficient financial intermediation to the productive sectors of the economy, thereby facilitating capital accumulation and investment to generate faster growth and ensure that development benefits citizens by way of better pensions and improved insurance products.
Banks dominate the financial system in Bangladesh with 63 per cent of total assets, while the capital market has 34 per cent, and the insurance sector only 3 per cent of the total financial system’s assets. Of the 56 scheduled (licensed) banks operating in in the country, there are five state-owned commercial banks (SOCBs), three government-owned development banks, nine foreign commercial banks, and 39 domestic private commercial banks, including eight Islamic banks.
SOCBs and state-owned development banks (SODBs) account for around 30 per cent of the banking system. Moreover, they have a deep branch penetration across Bangladesh, including rural areas, making them well-poised to play an important role in promoting financial access.
At the same time, poor management and governance, weak credit underwriting systems, and internal controls and limited capacity have meant their financial performance has been weak, capital levels have suffered, and asset quality has been a persisting concern.

The interest rates of the loan for Dhaka and Chittagong areas have also been reduced to 9.5%-8.5% from existing 10%-12%