Dhaka, Bangladesh (BBN)– The central bank of Bangladesh has appointed an observer to the Farmers Bank Limited (FBL) for improving financial health through strengthening monitoring and supervision of the bank, officials said.
ANM Abul Kashem, general manager of the Foreign Exchange Investment Department of the central bank, has been appointed as observer of the private commercial bank (PCB), the central bank said in a notification on Wednesday.
Launched in June 2013, Farmers Bank is the first among the new nine PCBs that got a central bank’s observer.
“The central bank has appointed the observer aiming to improve internal control and compliance, risk management and ensuing credit discipline of the new PCB through strengthening supervision and monitoring,” a senior official of the Bangladesh Bank (BB) explained.
He also said the observer is empowered to attend policy making meetings including board of directors, executive committee and audit committee of the bank to oversee their functions.
The BB’s latest measure came after detecting irregularities in sanctioning and disbursing loans and hiding information on non-performing loans amounting to around Tk 4.0 billion in the FBL.
Three central bank investigation teams found the irregularities in inspections of the bank’s Gulshan, Motijheel and Shyampur branches in the capital Dhaka between September and November in 2015.
The central bank has so far appointed 15 observers to different commercial banks on similar grounds of aberrations—and even lending scams–to ensure good governance in the financial institutions.
Among them are six state-owned commercial banks (SoCBs) alongside two non-banking financial institutions (NBFIs).