Muhith says the board will be ‘reformed in a short time’ 

Bangladesh Bank has recommended the government taking actions against chairman and board of directors of BASIC Bank for their alleged involvement with the bank’s Tk4,500 crore loan scams.
The central bank sent a letter to the finance ministry yesterday saying that the chairman and board of directors cannot avoid their responsibility in one of the country’s biggest credit forgeries.
In the afternoon yesterday at the Secretariat, Finance Minister AMA Muhith told the Dhaka Tribune that he had received the letter but was yet to read it.
He, however, said the board would be “reformed in a short time.”
Muhith said: “We cannot dissolve a board instantly. We have to wait until formation of another board of directors.” But Bank Division Secretary Dr M Aslam Alam declined to make any comment on the matter.
Although Bangladesh Bank had sent such letters earlier recommending actions against the present board of BASIC Bank, the finance ministry didn’t initiate any move.
Under the Bank Company Act, the central bank cannot take actions against bank officials appointed by the government. It can only report about the government-appointed chairman and directors to the government about their irregularities with recommendation to consider actions against the misdeeds.
Under a recent amendment to the law, Bangladesh Bank has already removed BASIC Bank Managing Director Kazi Faqurul Islam for the loan scams with a directive to halt lending in the bank’s Gulshan, Dilkusha and Shantinagar branches in Dhaka.
In a recent letter, finance ministry asked the central bank to stop loan activities in Gulshan branch of BASIC Bank and provide a review of all steps taken against the bank in last one year, said a senior executive of the central bank.
Following the instruction, Bangladesh Bank decided to suspend loan disbursement of the three branches, he said.
The central bank also sent a review of steps taken against the BASIC Bank over the last one year.
Sheikh Abdul Hye Bacchu is the Chairman of BASIC Bank’s board of directors while the members are Shubhashish Bose, Fakhrul Islam, Shyam Sunder Sikder, Neelufar Ahmed, Quamrun Naher Ahmed, Md Anwarul Islam and Anis Ahamad.
Investigations by Bangladesh Bank last year revealed that the Basic Bank had approved loans of Tk4,500 crore, mostly without proper documentation or scrutiny.
Most of the irregularities took place in four branches - Motijheel, Shantinagar, Dilkusha and Gulshan - that granted loans of Tk4,424.93 crore between December 2009 and November 2012 on poor documents and inflated mortgages.
The bank gave loans to nonexistent companies and promptly approved loans to clients after they had opened accounts. In September last year, a memorandum of understanding was signed between Bangladesh Bank and BASIC Bank to rein in the financial irregularities rampant in the state-run scheduled bank for the past few years.
But the central bank’s latest investigations still found irregularities continued at BASIC Bank, even as recently as January, which prompted Bangladesh Bank to slap a notice to the bank’s MD Kazi Faqurul asking why he should not be removed from his position.

WASHINGTON: World food prices rose in the first quarter of the year for the first time since their all-time high in August 2012, driven by rising demand in China, drought in the United States and unrest in Ukraine.

According to the World Bank internationally traded food prices increased by a sharp 4.0 percent. The leap was led by wheat and maize, up 18 percent and 12 percent, respectively.

As a result, international food prices in April were only 2.0 percent lower than a year ago and 16 percent below their record level in August 2012, the bank’s quarterly food price report said.

“Increasing weather concerns and import demand—and, arguably, to a lesser extent, uncertainty associated with the Ukraine situation—explain most of the price increases,” the report said.

World Bank economists said prices increased despite bumper crops in 2013 and continued projections of record grain harvests and stronger stocks expected for 2014.

Persistently dry conditions in the United States and strong global demand, particularly from China, partly explained the price rises.

But Ukraine, the breadbasket of eastern Europe, played a part, posting the largest domestic price increases for wheat and maize.

Ukraine, the world’s sixth-largest wheat exporter, saw domestic wheat prices jump by 37 percent, driven in part by currency depreciation.

Overall, international wheat prices soared by 18 percent quarter-over-quarter.

“Such a steep price increase had not occurred since the months leading to the historical peak in the summer of 2012,” the report said. —AFP

After introducing various types of banking services for farmers, sharecroppers and some other underprivileged people, Bangladesh Bank (BB) is now set for bringing street children under institutional financial support, reports BSS. Governor Dr Atiur Rahman will inaugurate the new horizon of banking services on May 31, Saturday, which would help children develop their savings habits and eventually help them step forward towards better future.
Earlier on March 10 this year, the central bank in a circular asked all banks to allow street children and child workers open bank accounts by taking a deposit of Taka 10 only, which is similar to the accounts of farmers and others who cannot afford normal banking services.
Following the directive, 10 banks so far teamed up with the non-government organisation Save the Children for offering the services.

Bangladesh Bank governor Atiur Rahman speaks as chief guest at a luncheon organised by American Chamber of Commerce in Bangladesh at Ruposhi Bangla Hotel in the capital on Wednesday. AmCham president Aftab Ul Islam and American ambassador to Bangladesh Dan W Mozena were also present, among others.

Bangladesh Bank governor Atiur Rahman on Wednesday said that the good corporate organisations are getting loans at 11 per cent interest.‘I have been told by the business people that they are getting loan at 11 per cent,’ he said while speaking as chief guest at a luncheon organised by American Chamber of Commerce in Bangladesh at Ruposhi Bangla hotel on the day.‘If you have good records they are giving loans at 11 per cent. The bad corporate houses should not get loans as they don’t return them,’ he said.Iqbal Ahmed, a businessman present at the meeting, however, said that he was not getting loan at less than 18 to 19 per cent interest.‘I never miss a single instalment but still the banks are not giving loan at less than 18 to 19 per cent rate,’ he said.AmCham president Aftab Ul Islam also expressed his concern about the high bank interest.‘We have high bank rates and bringing investment is still a concern despite having all the positive figures considerable for investment,’ he said.Aftab also urged the BB governor to consider the bank rate issue more deeply.Atiur, however, said that there is no reason for the banks to charge high interest.‘The banks have idle money and if they don’t invest they will incur loss. So I don’t see a point why the banks would charge high interest rate,’ he said.He also advised Iqbal to contact international agencies like the IFC for loan as the central bank has special programme with such partners.‘They will give you loan at 5 per cent interest,’ he said.Aitur said he was not happy with the current inflation figure as the rate should be lower than existing 7.5 per cent.‘The monetary policy can control only the non-food inflation effectively which we have done successfully. The non-food inflation is not more than 4 to 5 per cent. But when it comes to food inflation we can hardly do much,’ he said.The BB governor said that the country made 6.12 per cent GDP growth in the current fiscal year.‘Such progress is commendable despite the odds. And we should trust Bangladesh Bureau of Statistics data on this issue rather than expressing doubts,’ he said.He said the country might have some political situations once in a while but that should not undermine the economic management we are performing,’ he said.He, however, agreed that some financial mismanagement took place in the state-run banks.‘But we are handling the situation firmly. As you may have seen I have already fired a chief executive of a bank. If we found any other we will do the same,’ he said.American ambassador to Bangladesh Dan W Mozena said that the success story of Bangladesh is not properly told to the world.‘Bangladeshis need to tell inspiring stories to the world to attract the investors,’ he said.