Dhaka, Bangladesh (BBN) – The central bank of Bangladesh has appointed observer to Bangladesh Krishi Bank (BKB) for improving its financial health through ensuring corporate governance, officials said.
Bangladesh Bank (BB) has assigned its General Manager Shah Alam to oversee the board of directors’ overall activities of the state-owned bank.
The Offsite Supervision Department (DOS) of BB issued an official order in this connection on Monday, they added.
The observer will oversee the risk management, internal control and compliance (ICC), internal auditing, human resource development and recovery of non-performing loans (NPLs) of the specialised bank.
The observer is empowered to attend policymaking meetings, including those of board of directors, executive committee and audit committee, of the BKB to oversee their functions, according to the central banker.
He also said the central bank gave the appointment to the observer to help out the state-owned bank through implementation of the relevant memorandum of understanding (MoU) properly.
The BKB is now under the MoU with the BB for improving their financial conditions, ICC and corporate governance.
The observer appointment came against the backdrop of deteriorating trend of the key financial indicators of the BKB despite close monitoring by the central bank, another central banker said.
The amount of NPLs of BKB stood at BDT 43.10 billion as on September 30 last which was 25.37 per cent of its total outstanding loan, the BB data showed.
Earlier on November 18, the BB appointed the observers with sweeping oversight authority to help improve four state-owned commercial banks (SoCBs) deteriorating financial health.
The central bank appointed an observer on November 28, 2013 to the state-owned BASIC Bank for the first time for improving financial health.