Dhaka, Bangladesh (BBN)– The central bank of Bangladesh finally waived the penalty of BDT 1.0 million awarded to the Farmers Bank Limited (FBL) on submission of corrected report on BDT 382.60 million as loans.
The waiver was approved at a board-of-directors meeting held in the central bank headquarters in the capital Dhaka on Tuesday with Bangladesh Bank (BB) Governor Atiur Rahman in the chair.
“The BB board approved the waiver of the penalty after the bank had submitted correct information on their loan portfolios,” a senior central banker told BBN .
He also said the central bank board holds the authority to waive imposed penalty in some cases under the existing Banking Companies Act.
Talking to BBN, another BB official said the central bank had earlier imposed the penalty on the fourth- generation private commercial bank (PCB) following concealment of information on the loans provided to six business entities.
He also said the PCB earlier submitted a letter to the board of directors of the BB, seeking exoneration.
Earlier on January 11 last, the FBL management filed a writ petition seeking stay from the High Court on the central bank’s instructions imposing such fines.
FBL is the first bank to go to the court against the central bank’s action. The BB also moved to the court to defend its action and got verdict in its favour.
The central bank also appointed an observer on January 13 to the FBL for improving its financial health through strengthening monitoring and supervision of the bank operations.
The BB measure came on detection of irregularities in sanctioning and disbursing loans and hiding information on non-performing loans amounting to around BDT 4.0 billion in the FBL.