Publish: 16 Sep 2023, 12:12 pm
No matter how influential the directors of the bank are, they do not have the power to settle the bank's transactions directly. The managing director (MD) of the bank has the power to finalize the disbursement of loans, payment of import-export bills, interest waiver, payment of purchase bills and recruitment of manpower. Un-named loans, laundering money for imported goods abroad, employment of labor in bribe trade and raising of bills in the name of purchases are all done by the management authority headed by the MD. That is why bankers are always caught in cases of banking irregularities and corruption. Influential directors remain out of touch in these incidents. MDs are suddenly resigning due to personal reasons after failing to fulfill reckless unethical demands of directors.
Some become MDs with different aims of the directors. Again, the MD has to look after the interests of the directors. There is also pressure to pass loans in their own names, in names of fictitious companies, and to launder money abroad. Meanwhile, the directors of the bank have taken a loan of two and a half lakh crores from each other's banks. Many times the MD fails to meet the demands of the directors. As a result, distance between the MD and the directors increases. Those directors create such a situation in various meetings including the board meeting of the bank, in which the MDs are forced to resign. Sometimes the MD is asked to resign either by way of gesture or directly. But there is no evidence or record of these.
Bank owners are becoming influential not only in bank management, but also in the law making of the country. Directors can amend the law as they wish. In many cases, their demands are prevailing, ignoring the views of the central bank. In the latest amendments in the Bank Company Act last year, the term of the directors was extended to 12 years and the issue of new loan opportunities for another company was added in the context of the request of the directors. By bypassing the regulatory body, they are getting the benefits they need when they amend the law. As a result, they see no problem in putting pressure on MDs.
Bangladesh Bank's former governor Dr. Salehuddin Ahmed said that the bank's MDs usually keep pace with the directors. Many times MDs resign due to fear of future ACC or lawsuits for acting against the policy. This is what happens in most cases. And when some people see that they cannot act like the director wants, then they move away with respect.
The former governor also said that MDs should not be allowed to resign at will. At least not under bad circumstances. This sends a bad message to everyone including the depositors. The issue of resignation should be addressed subject to proper action being taken knowing the exact reason.
In 2014, the central bank introduced a safeguard policy to prevent sudden resignation or dismissal of MDs. The reason behind that policy was the National Bank. At that time no MD could survive in the bank. In such a context, the policy of the central bank says that if someone wants to leave the MD post, he must send notice one month before. Again, if the board wants to exclude someone, it must be informed one month in advance. In both cases the decision of the Central Bank shall be final. But this security policy is not helping much either.
Bangladesh Bank has not always taken steps to protect MDs. During the takeover of Islami Bank and Social Islami Bank by Chittagong business conglomerate S Alam Group in 2016 and 2017, the MDs resigned 'voluntarily'. At that time their resignations were accepted without question and Bangladesh Bank itself approved the appointment of the new MD with unusual speed. During the corona period, MD resignations are slightly reduced. However, this year MDs seem to have resigned.
On January 16, National Banks acting MD Mehmood Hossain resigned under the pressure of the 'Sikdar family', the authority of the bank. After this, Bank Asia MD Arif Billah Adil Chowdhury resigned last July. Padma Bank MD Tarek Riaz Khan and South Bengal Agriculture and Commerce Bank MD Habibur Rahman resigned last week. Various discussions are going on about the resignation of four MDs in such a short period of time. Although these MDs resigned citing personal reasons, but the concerned thinks they were forced to leave their posts due to the pressure of the directors.
Dr. Moinul Islam, a former professor of economics department of Chittagong University, said that it is difficult to work as MD of a bank by following the correct rules. Directors are now directly interfering in the operations of the bank. So resignation like this is not unusual, rather it will increase day by day. Bangladesh Bank will not be able to do much about this. Because bank managers are very influential.
Talking to the concerned people, it is known that Mehmood Hossain joined the post of MD of National Bank in December 2021. Two days before his resignation, he was called to Banani's Sikder House by the Sikder family, which controls the bank. Two days after returning from there, he submitted his resignation citing personal reasons. However, through the mediation of Bangladesh Bank, Mehmood Hossain joined National Bank as MD again. Bank Asia is known as the best bank in the country. Romo Rauf Chowdhury was elected as the chairman of the bank in August last year. After that, Arif Billah Adil Chowdhury was appointed as MD of the bank in November last year for three years. However, he resigned on July 26 after less than eight months. It will be considered as his holiday till October 21. His resignation will be effective thereafter.
On September 3, Padma Bank (converted from Farmers Bank) MD Tarek Riaz Khan, resigned due to various frauds. His tenure was till March 2025. Last September 7, South Bengal Agriculture and Commerce Bank MD Habibur Rahman resigned. He joined the bank in December last year. His tenure was till December 2025. A ZM Shafiuddin Shamim was elected as the new chairman of the bank last August. He became the chairman before the term of the previous chairman Thermex Group owner Abdul Qadir Mollah expired. It is known that Abdul Qadir Molla thinks that Habibur Rahman's role was behind his loss of the chairmanship.
Meanwhile, Bangladesh Bank wants to stop sudden resignation of MDs to prevent the crisis of people's confidence in the bank. Bangladesh Bank has started discussions for this. Meanwhile, Bangladesh Bank Governor Abdur Rauf Talukdar and Deputy Governor Abu Farah Md Naser have discussed separately with South Bangla Agriculture and Commerce Bank (SBAC) MD Habibur Rahman, Padma Bank MD Tarek Riaz Khan, Bank Asia Arif Billah Adil Chowdhury, Asia Chairman Romo Rauf Chowdhury.
Those concerned said that in the current financial crisis, Bangladesh Bank does not want any new crisis to arise. Apart from this, the central bank is trying to ensure that bank MDs can manage the bank professionally.
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