Observer in BKB appointed

Siddique Islam | November 24, 2015 00:00:00

The central bank has appointed one more observer to another state-owned specialised bank for improving its financial health through ensuring corporate governance, officials said.

Bangladesh Bank (BB) has assigned its General Manager Shah Alam to oversee the board of directors' overall activities of Bangladesh Krishi Bank (BKB).

"Our Offsite Supervision Department issued an official order in this connection on Monday," a BB senior official told the FE.

The BB official also said the observer will oversee the risk management, internal control and compliance (ICC), internal auditing, human resource development and recovery of non-performing loans (NPLs) of the state-owned specialised bank.

The observer is empowered to attend policymaking meetings, including those of board of directors, executive committee and audit committee, of the BKB to oversee their functions, according to the central banker.

He also said the central bank gave the appointment to the observer to help out the state-owned bank through implementation of the relevant memorandum of understanding (MoU) properly.

The BKB is now under the MoU with the BB for improving their financial conditions, ICC and corporate governance.

The latest observer appointment came against the backdrop of deteriorating trend of the key financial indicators of the BKB despite close monitoring by the central bank, another BB official said.

The amount of NPLs of BKB stood at Tk 43.10 billion as on September 30 last which was 25.37 per cent of its total outstanding loan, the BB data showed.

The central bank appointed another observer six days after appointing the same to four state-owned commercial banks (SoCBs) aiming to improve the financial conditions of the state-owned banks.

Earlier on November 18, the BB appointed the observers with sweeping oversight authority to help improve the SoCBs' deteriorating financial health.

The central bank appointed an observer on November 28, 2013 to the state-owned BASIC Bank for the first time for improving financial health.

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