Regulator finds Agrani MD's links to Tk 792cr anomalies

Regulator finds Agrani MD's links to Tk 792cr anomalies

The managing director of Agrani Bank violated rules for loans amounting to Tk 792 crore, Bangladesh Bank finds in an inspection into the state bank.
The BB last week served notice on Syed Abdul Hamid seeking explanations from him under the Banking Companies Act for nine counts of irregularities.
The show-cause notice is a second instance of action against the managing director of a state bank.
If his clarification is not satisfactory, the central bank can remove him from the post of managing director of the state-run bank, as per the amended law of 2013.
Before the amendment, the central bank could not remove a chief executive of a state bank.
The BB served such notice for the first time on BASIC Bank's Managing Director Kazi Faqurul Islam, who was later removed.
The move against Hamid comes after the central bank's inspections into Agrani's main branch and the Asadganj and Laldighi East branches in Chittagong established the allegations against him.

The BB notice said Hamid approved loans for a select few clients by violating the directives of the central bank and the board of directors of Agrani.
In 2011, a Tk 120 crore loan was extended to Tanaka Tradecom International from the bank's main branch. The loan was approved by Agrani's board with the condition that supplementary collateral must be kept as security with the bank.
Tanaka Tradecom later proposed changes to the condition, which Hamid approved without the consent of the board.
Later in 2015, he rescheduled loans of the company amounting to Tk 10.79 crore -- a decision he was not authorised to make.
In another instance of violation, Hamid rescheduled a Tk 42.38 crore fund for Muhib Steel & Ship Recycling Industries that was already classified as bad loan.
Once again, he went above and beyond his authority to do so and without taking the approval of the board.
Not only that, Muhib Steel was given letters of credit facility time and again, which took its total outstanding amount to Agrani to Tk 91.93 crore. The entire amount has now been classified as bad loans.
Serious irregularities were also committed by Hamid when disbursing loans to Mizanur Rahman Mizan, a customer of Agrani's main branch, and various companies linked to the client's Sun Moon Group.
The outstanding loans now stand at Tk 300 crore and they have become risky.
In another move, the BB had instructed Agrani not to delegate any responsibility to its deputy managing director, Mizanur Rahman, temporarily for irregularities. The bank's board of directors directed the management to carry out the regulator's instruction.
Yet, Rahman was given the charge of different divisions including the recovery division -- a clear violation of the BB directive and the decision of the board, according to the central bank letter.
An official of the BB said the central bank inspections also found irregularities in loans given to Agrani's many other clients, including Zaynab Trading of Chittagong.