Farmers Bank takes BB to court

The High Court has stayed for four months a Bangladesh Bank (BB) decision to fine the Farmers Bank on charges of irregularities. The HC bench of Justice Tariqul Halim and Justice Bhishmadeb Chakraborty on 11 January issued the order after hearing a writ petition filed by the Farmers Bank, challenging the central bank decision.

In the same day, the Farmers Bank’s lawyer Anupam Biswas informedBangladesh Bank about the court decision through a letter, said authorities of the Farmers Bank. Bangladesh Bank deputy governor SK Sur Chowdhury on Monday confirmed this to Prothom Alo.

Bangladesh Bank appointed an observer on 13 January to scrutinise operations of the Farmers Bank Limited and slapped a fine on chargesof illegal payment and loan irregularities. On the other hand, a parliamentary committee on Sunday summoned a scrutiny report conducted on the functioning of the Bangladesh Bank.The committee, led by former minister Mohiuddin Khan Alamgir, has asked the audit office to submit the report following a special scrutinyof Bangladesh Bank operations. MK Alamgir is chairman of the Farmers Bank.Within four days of that decision, the parliamentary committee raised the issue of the central bank’s functioning.

When contacted, Farmers Bank lawyer Anupam Biswas told Prothom Alo said the central bank did not follow the due processes of fining aninstitution. MK Alamgir, chairman of the Farmers Bank, was not available to talkon the issue. Former governor of the Bangladesh Bank Salehuddin Ahmed told Prothom Alo, “Anyone has the right to go to the court. However, I have never seen any bank going to the court to avoid a fine.” “The Bangladesh Bank should now engage a good lawyer to challenge the stay order,” he added. Some more irregularities: The Bangladesh Bank in a 3 January letterinformed Farmers Bank managing director Choudhury Moshtaq Ahmed about some more irregularities of the bank. It sanctioned a loan of Tk 11.54 crore for Green Land Technology although the limit was Tk 10 crore. The Green Land Technology is affiliated with Prime Bank director and vice chairman Khandker Mohammad Khaled.Besides, the bank provided a loan to Onamika International and Onamika Enterprise, neither which exist.Ronok Enterprise proprietor Rezaul Karim was endorsed to open letter of credit (LC) of 8.02 lakh dollars without approval of head office. The head office barred release of loan to Aduri Housing Limited, but the branch office went ahead with the loan without following the headoffice’s instruction. Such actions are a threat to banking discipline.

Courtesy: Prothom Alo