Dhaka, Bangladesh (BBN) – The government has re-appointed Syed Abdul Hamid as Managing Director and Chief Executive Officer of Agrani Bank Ltd for another year without complying with the provisions of Banking Companies Act properly.
The finance ministry officials, however, said the re-appointment has been made in accordance with the Banking Companies Act.
The Bank and Financial Institutions Division (BFID) under the Ministry of Finance (MoF) issued a notification in this connection on Thursday, a senior official of the ministry said.
“The re-appointment doesn’t require prior permission from the Bangladesh Bank (BB),” Gokul Chand Das, Additional Secretary of the BFID, said without elaborating.
According to Section 15 (4) of Banking Companies Act-1991 (amended up to 2013), except for specialised banks, all other banks must get prior approval from the central bank for appointing any of their directors and managing directors.
Re-appointment means a fresh appointment so that all the related procedures have to be complied accordingly, a BB official explained.
“The ministry grossly violated the existing Banking Companies Act by re-appointing the Agrani Bank MD without taking the BB approval,” the central banker said.
He also said the BB recently gave approval to reappointment of Sonali Bank managing director Pradip Kumar Dutta after the finance ministry put forward a recommendation for him.
Talking to BBN, another BB official said the board of directors of Agrani Bank Ltd had sought approval for re-appointment of the bank’s MD and CEO, but the central bank kept mum about this due to alleged irregularities against him.
In 2014, the central bank found that the state-owned commercial bank (SoCB) disbursed around BDT 3.00 billion in loan to Moon Group owned by businessman Mizanur Rahman for the construction of three buildings with unapproved structural designs while the Group shifted the loan to other sector without constructing the buildings.
The BB unearthed that the MD and CEO of the SoCB was involved in the financial irregularity.
In a recent investigation, Agrani Bank’s board of directors also found involvement of the MD in the Moon Group financial irregularity.
“We’ve sent the inspection report of the Agrani Bank on its MD and CEO to the MoF, seeking opinions in this connection,” the central banker noted.