An internal report has detected involvement of immediate past chairman, directors and management in major loan scams and irregularities taking place in BASIC Bank during 2010-2014 period.
The bank has prepared its own report on the basis of a number of reports, including inspection report of Bangladesh Bank, report of commercial audit department, two audit reports of the audit firms engaged by the bank itself, and internal evaluation report.
The internal report was submitted to the Parliamentary Standing Committee on Ministry of Finance at its 19th meeting held on Wednesday.
Committee chairman Abdur Razzaq chaired the meeting at the Jatiyo Sangsad (JS), where Finance Minister A M A Muhith was present.
The report stated that BASIC Bank disbursed loans amounting to Tk 59.95 billion in favour of 187 clients. Of the amount, Tk 51.18 billion was funded and Tk 8.77 billion non-funded. The loans were disbursed despite negative opinion given by the branch loan committee and head office loan committee.
Anti-Corruption Commission (ACC) filed 56 cases against 120 people in September 2015, drawing criticism from all quarters. The ACC dropped the then chairman of the bank Sheikh Abdul Hye Bacchu's name from the list of accused persons.
Describing various irregularities, the report said BASIC Bank disbursed loans to big and commercial sector clients instead of small and medium enterprises, which was not consistent with its objectives.
The credit growth of the bank during the period under review was four times more than that of 2009. No rules were followed in loan approval and disbursement and loans were disbursed without collateral and verification.
Besides, in most cases loans were sanctioned and disbursed in abnormally fast speed. The bank also gave loans to a number of defaulters by violating Article 27 (KA) of Bank Company Act.
Besides, 24 board memos were shown as approved by the previous board of directors in the minutes, although the management did not present those before the board. In reality, the memo numbers were given post-facto. Besides there was no board memos bearing numbers 310, 311, 313, 314 and 324.
It means the bank's head-office credit committee had no recommendation for those loan proposals. The total loan amount thus disbursed was about Tk 4.0 billion, which were rescheduled later, the report mentioned.
Besides, 48 loan proposals were shown as approved under miscellaneous agenda in the minutes of 13 meetings although those proposals were not presented before the board. The total loan amount in those proposals was Tk 14.75 billion.
Referring to various irregularities by the chairman, the report said he himself put signature on manually corrected loan documents in favour of Vasavi Fashion Ltd in Gulshan branch.
In another case, the chairman himself corrected loan documents manually in favour of Tahmina Denim Ltd and Syed Traders. Two other relevant persons concerned did not sign.
Besides, the then deputy managing director Sheikh Manzur Morshed signed the minutes of 280th meeting instead of the managing director. Same irregularities took place in the minutes of 265th meeting.
The then chairman used to instruct in writing on the job applications who should be appointed where and to which posts. He took approval of those instructions from the board through the management by violating BB rules on appointment of bank employees.
Concluding the report said the irregularities that had taken place in the BASIC Bank are rare in nature in the banking sector. The maximum irregularities took place in Gulshan branch, followed by Shantinagar, Dilkusha, head-office and Karwanbazar branches.
BASIC Bank appointed a number of dismissed bankers from various private banks, and posted them in Gulshan and Shantinagar branches.
Some middle-men were created to collect loan proposals, by whom BASIC Bank authority collected proposals and submitted to the branches, and later sent to the head-office to present before the credit committee. Thus money was disbursed without proper approval and documentation through irregularities.
Meanwhile, in a press briefing after the meeting, Abdur Razzaq did not mention anything about the BASIC Bank's report.
He said the government is determined to implement the VAT Law 2012 from July 01. For that various stakeholders, including representatives of the major trade-bodies, were invited in the meeting.
The JS body thinks all the disputes centring the VAT Law should be resolved before the next budget to help implement the law and to increase revenue from domestic sources.
The businesses should not stick to the current VAT Law, the committee chairman added.