BB appoints observer to Mercantile Bank

The central bank has appointed its observers for various reasons to five more banks

Bangladesh Bank (BB) has appointed an observer to Mercantile Bank in the backdrop of loan irregularities allegedly committed by the board of directors.

Masud Biswas, general manager of Foreign Exchange Policy Department, has been appointed as an observer to the board on Wednesday.

He would attend all the bank’s board meetings, executive and audit committee meetings to report to the central bank about the board activities, according to a BB letter sent to the Mercantile Bank yesterday.

The observer was appointed as the Bangladesh Bank found irregularities in processing loans approval by the board, said a senior executive of the central bank.

The board had earlier provided loan worth Tk250 crore to Sanmar group, which is involved in Chittagong-based hotel business, violating loan formalities.

The bank showed an interest from the given the loans in its income despite not having any earnings from the loans, said a senior executive of Bangladesh Bank.

The board also approved loan of Tk300 crore to Jamuna group violating single borrower exposure limit. Moreover, the bank did not classify the loan account though it was classifiable, he said.

Bangladesh Bank investigation also found the former Mercantile Bank chairman M Amanullah, now a director of the bank, embezzled Tk2 crore from the bank’s Corporate Social Responsibility (CSR) fund.

Mercantile Bank’s board of directors, led by the then chairman Amanullah, approved the fund to Aman Group Foundation to build a charitable kidney dialysis hospital at Keraniganj in Dhaka.

The central bank has appointed its observers for various reasons to five more banks, including state-run BASIC Bank, Bangladesh Commerce Bank, ICB Islamic Bank, National Bank and Islami Bank.

Source: Dhaka Tribune

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