Bangladesh Bank is scrutinising CIB (Credit Information Bureau) reports on the sponsor directors of the new five banks awaiting final clearance from the central bank for starting operation, BB sources said.

At the same time, the National Board of Revenue (NBR) is examining whether taxes are paid of Tk 4 billion deposited by each bank with BB as paid-up capital for having the licence.

The five banks are South Bangla Agricultural and Commerce Bank (SM Amzad Hossain), Midland Bank (M Moniruzzaman Khandker), Union Bank (former President H M Ershad), Meghna Bank (H N Ashiqur Rahman MP) and NRB Bank (Farasat Ali).

A senior BB official told BSS the central bank has been investigating whether there is any default loan in the name of sponsor directors.

News: The Daily Sun/Bangladesh/5th-Dec-12

In this December 1 photo, a World Bank team arrives at Anti-Corruption Commission's head office in the capital to hold a meeting on the anti-graft body's progress in investigations into the Padma bridge project corruption.

The meeting between the visiting external panel of the World Bank and the Anti-Corruption Commission ended Wednesday without any breakthrough.

The WB panel today sat with the graft watchdog twice to reach a consensus on the names of persons to be included in the enquiry report on corruption allegations in the Padma bridge project.

After completing the talks with the ACC at its office at Shegunbagicha, the WB panel left for the airport.

Before leaving the ACC office at 6:35pm, the head of the external panel former chief prosecutor of the International Criminal Court Luis Moreno Ocampo said, “The panel appreciate the open and frank discussion with the ACC.”

Earlier in the afternoon, the team held a meeting with the anti-graft body and left its office.

Ellen Goldstein, WB country director for Bangladesh, told the media, “We continue to have some unresolved issues and as a result we are going for some internal consultations now.”

“It is possible that we will be coming back today for further discussions,” Goldstein added.

After leaving the ACC office, the team met with the Finance Minister AMA Muhith at his residence.

Later they returned to the ACC around 6:35pm for further discussions.

The meeting between the WB team and the graft watchdog ended inconclusively on Tuesday, as the panel was unhappy at the commission's bid to drop the name of ex-communications minister Syed Abul Hossain from the draft enquiry report.

Sources in the ACC said the two sides had a difference of opinion over the draft enquiry report, as the ACC dropped some names, including that of Abul Hossain, though the WB gave sufficient evidence of corruption against him along with others.

External team arrived in Dhaka for the second time on December 1 and started talks with the ACC from the next day to know the progress the anti-graft watchdog made in investigating the evidence of corruption in the Padma bridge project.

Earlier the external panel came to Dhaka on October 14 for the first time.

The original $1.2 billion WB credit for the bridge was cancelled on June 29 due to an insufficient response by Bangladeshi authorities to evidence of a conspiracy of corruption involving senior public officials.

Subsequently, additional actions were undertaken, and on September 20 the government agreed to go by four conditions that also include proper investigation into the allegations.

News: The Daily Star/Bangladesh/5th-Dec-12

The central bank of Qatar agreed in principle to deposit $1.8 billion with Bangladesh Bank, which would boost the country's foreign exchange reserve.

BB Governor Atiur Rahman held a meeting with the acting governor of Qatar Central Bank, Sheikh Fahad Faisal Al-Thani, in Qatar recently, according to a BB statement.

A technical committee of both the central banks will work out the terms and conditions.

A memorandum of understanding will be signed between the two central banks soon. The BB has already given the central bank of Qatar a draft MoU, which is being examined now.

The BB is expected to send a technical team early next year.

An analyst said it is a kind of borrowing by one central bank from another to boost forex reserves.

The foreign exchange reserve stood at $11.81 billion yesterday, which is equivalent to around four months' import bill of the country.

The decision of Qatar Central Bank followed earlier discussions between Prime Minister Sheikh Hasina and the emir of the Gulf state.

During the meeting, Qatar also wanted to recruit some experts from Bangladesh for advising its central bank.

News: The Daily Star/Bangladesh/5th-Dec-12

Bangladesh Bank has opened a probe into the whereabouts of the Sonali Bank money embezzled by Hall-Mark Group, on advice from the International Monetary Fund.

The financial intelligence unit of the central bank will also see whether the amount has been siphoned off abroad or kept inside the country, said BB officials.

In the backdrop of big scams in different state banks, the IMF may tag a major condition of conducting special diagnostic examinations in those banks before releasing the third instalment of its $1 billion loan for Bangladesh.

A central bank official said they have launched the drive as the IMF and the Anti-Corruption Commission (ACC) have enquired about the money.

The Hall-Mark Group and some other businesses swindled about Tk 3,557 crore from Sonali Bank showing fake documents. Of the amount, Hall-Mark alone embezzled Tk 2,626 crore.

An IMF team, now in Dhaka, wanted to know from the BB what steps it has taken to realise the amount. The mission has also enquired about the scam involving BASIC Bank, the official said.

Since November 27, the IMF has been in talks with the central bank over the Hall-Mark issues.

The BB has already informed the global lender that it has sought information relating to the Hall-Mark Group from all banks, and as soon as the information will be available, those will be conveyed to the IMF.

On realising the embezzled money, the central bank told the IMF that Sonali Bank has already securitised a portion of the money swindled by the Hall-Mark Group by taking the Group's land as mortgage.

The BB also told the lender that the irregularities came to light first in a BB investigation and stern actions were taken against other banks where such irregularities were detected.

A total of 23 other banks were involved in 'bill purchase' by Hall-Mark Group from Sonali Bank's Ruposhi Bangla branch.

The BB has carried out a special investigation into the branches of those banks. Irregularities on the part of branch officials of some banks were found and those were referred to the anti-graft body for taking further actions.

In the context of various incidents of scams, the IMF has suggested massive reforms in the state-owned banks.

As part of the reform programme, the lender has advised the BB to conduct a special diagnostic examination of the state banks on their asset quality, liquidity management, internal audit and controls.

The government will make commitment to the IMF that it would carry out the special diagnostic examinations by March.

An official of the finance ministry said such reforms may be one of the major conditions for getting the IMF loan.

The BB itself made allegation to the government that some directors of the state banks were involved in the Hall-Mark scam.

The IMF now wants to know how the new directors are being selected and will closely watch whom the government appoints as directors.

However, the government will appoint the directors and senior management of the banks in line with the BB criteria.

News: The Daily Star/Bangladesh/5th-Dec-12

Finance Minister AMA Muhith on Monday reiterated its firm decision to retain power with the Ministry of Finance (MoF) in relation to the removal of directors of state-owned banks (SoBs).

The Muhith's stance is opposed to a suggestion made earlier by the International Monetary Fund (IMF) to transfer the same authority to the Bangladesh Bank (BB).

The IMF had asked the government to empower the BB to dismiss errant bank directors of SoBs through amending the Bank Company Act (BCA), 2003, to create a level-playing field in the banking sector. The BB is authorised to fire directors of private commercial banks (PCBs) for any wrongdoing.

"The consent of the government (MoF) in removing bank directors from SoBs should be a must since the government appoints them," Mr Muhith, responding to a question, told a group of reporters coming out of a closed-door meeting with the visiting IMF team at his office.

A team of Extended Credit Facility (ECF) mission of the IMF arrived in Dhaka on November 27 last on a 10-day visit. The mission members are now busy reviewing the reform measures undertaken by the government in the financial, banking and revenue matters.

"We held a very effective meeting between ourselves as issues like amending BCA, containing subsidy, enacting Value Added Tax (VAT) Act and adjusting fuel prices were the topics of discussion," Mr Muhith told the reporters.

AMA Muhith when asked about the reasons for not transferring power to BB said, "Because, we appoint them (directors), so the issue of their removal should require our involvement."

On the issue of price hike of petroleum, the finance minister said the issue was discussed with IMF.

"We did not mention any specific time-frame to increase the price of petroleum," Mr Muhith told the reporters.

"We will adjust the fuel prices at a suitable time. What we feel is --- the appropriate time for price hike of petroleum is the winter season," the finance minister elaborated.

News: The Daily Financial Express/Bangladesh/4th-Dec-12