Bangladesh Bank warns Financial Institutions of zero tolerance to infringement
4 March 2015, Nirapad News: Bangladesh Bank (BB) has warned the financial institutions (FIs) that there would be zero tolerance to infringement, saying that the FIs or their chief executive officers (CEOs) would be punished even if they flout the existing rules and regulations to a minimal extent.
“BB will show zero tolerance to violation of rules and regulations by the FIs and their CEOs”, Governor Dr Atiur Rahman told a meeting with the chiefs of FIs, held at the central bank’s headquarters in the capital city on Tuesday.
Noting with disappointment, the governor told the meeting that the vigilance cell of the central bank found that some FIs concealed information only to carry out irregular activities.
“The investigation into the allegations of errant activities is going on. The wrong doers would face the music once the investigation comes out with identifying the FIs and the CEOs who flouted the rules and regulations,” Dr Rahman said.
The governor also pointed out that the BB already noticed that some FIs violated the rules and regulations in their operations. These include payment of honorarium to the directors who were absent at the board meeting, frequent arrangement of board meetings despite the fact that there were no important agenda and holding of board meetings at some places other than the board room.
He said the monitoring by BB also uncovered that some FIs disbursed loans to their directors in fictitious names and carried out credit activities like scheduled banks.
“Some FIs even allowed their former directors and borrowers to be at their board meetings and influenced the important decision making process,” Dr Rahman said.
“We will take legal steps against these irregular activities,” the governor said, advising the CEOs to be more cautious about rules and regulations and conveyed the board of directors the decision of the Tuesdays meeting.
BB already removed a chairman, a CEO and few directors from different FIs and panelized a number of CEOs on ground of carrying out various activities, violating the Financial Institutions Act, 1993.
Dr Rahman said the central bank would not hesitate to take stern action against the wrong doers in the financial sector to protect the interest of the investors.
Following the meeting, deputy governor SK Sur Chowdhury told journalists that the central bank advised the FIs take effective steps soon to check all wrong practices in their operations.