The government Wednesday appointed observers to four state-owned commercial banks (SoCBs) with sufficient oversight authority to help improve the banks' deteriorating financial health, officials said.
Executive Directors of the Bangladesh Bank (BB) Mohammad Naushad Ali Chowdhury, Ahmed Jamal, Nirmal Chandra Bhakta and Abdur Rahim have been made observers respectively for Sonali Bank, Janata Bank, Agrani Bank and Rupali Bank.
The observers have been empowered to attend policymaking meetings, including those of board of directors, executive committee and audit committee, of the SoCBs to oversee their functions, according to the officials.
"We've appointed the observers aiming to improve the overall financial conditions of the SoCBs through implementing the MoUs properly," SK Sur Chowdhury, deputy governor of the BB, told the FE.
The anchor persons will work to ensure good governance in the public-sector banks by strengthening supervision and monitoring, the deputy governor explained.
Talking to the FE, another BB official said the overall performances of SoCBs have not been satisfactory for the past five quarters and so the observers have been appointed.
"We'll take necessary actions in line with our observers' report on the SoCBs' performances," the central banker noted.
Such remedial measure, according to banking industry people, has been long overdue.
The Article IV Consultation Mission chief of the International Monetary Fund (IMF) at a press briefing in Dhaka Tuesday last also listed the presence of high level of non-performing loans (NPLs) and weak governance as major sour points of state-owned banks.
According to an official announcement, the central bank gave the appointment to the observers to help out the banks through implementation of the relevant memorandum of understanding (MoU) properly.
The banks are now under the MoUs with the central bank for improving their financial conditions, internal controls and compliance (ICC) and corporate governance.
The BB earlier had identified four major problems with the SoCBs and asked them to resolve the problems immediately for improving their overall financial health.
The problems are: unsatisfactory level of cash recovery from defaulters, weakness in internal control and compliance, inadequate automation, and lack of good governance.
The placing of observers with the boards of the banks was made through separate letters, issued by the BB Offsite Supervision Department on the day.
The NPLs with the five SoCBs rose to 21.82 per cent during the July-September period of this calendar year from 20.89 per cent three months before, another BB official said, without elaborating.
He also said the BB included the name of BASIC Bank Limited as a state-owned commercial bank instead of specialised one or development-finance institution (DFI) in its classified-loan statement for the October-December period of 2014.
Earlier on November 28, 2013, the central bank appointed an observer to BASIC Bank for the first time in a state-owned bank for improving financial health.
siddique.islam@gmail.com
BB sends \\\'observers\\\' to four errant SoCBs
Siddique Islam | Published: November 19, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
Share if you like