Govt warns state-owned banks against car misuse

REZAUL KARIM | Published: April 04, 2020 22:07:04

The government has warned the state-owned banks and agencies against misuse of cars by their directors, officials said.
It has also asked them to strictly follow the existing policy issued by the Bangladesh Bank in 2019, they added.
It mentioned that stern action would be taken against the banks and agencies concerned as per the policy if they do not comply with such instructions.
The Financial Institutions Division under the finance ministry has issued the warning to all managing directors and chief executive officers of state banks and some state agencies after finding evidence of misuse and mismanagement of those cars.
The division observed that there was an increasing tendency for the directors of state-run banks and entities to misuse cars, a senior FID official said.
Continued misuse of vehicles of state-run banks and agencies is partly responsible for driving banks' operating costs up gradually, he mentioned.
Operating costs of some banks especially car maintenance costs have increased in recent times putting impact on interest rates, he added.
"In such situation, we are totally helpless to desist from misusing cars by several board directors of state-owned banks," the CEO of a state-owned bank said preferring anonymity.
"When a director asks for or proposes a car, how I will refuse him," he questioned.
On the other hand, he said, to serve different interests of several MDs/CEOs, they willingly provide the car facility to directors concerned.
According to Section 18 of Bank Company Act 1991 and Section 4.3© of BRPD circular 11, "The chairman may be offered an office room, a personal secretary/assistant, one peon/MLSS, one telephone at the office, one mobile phone to use inside the country and a vehicle in the business interest of the bank, subject to the approval of the board."
A significant amount of money is spent due to misuse of cars by some directors of state banks and agencies who are breaching the existing provision of the BB in this regard, a high official of the FID said.
"We have strictly cautioned the MDs and CEOs of state-owned commercial banks (SoCBs)--Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, Probashi Kallyan Bank, Ansar-VDP Unnayan Bank, Karmashangsthan Bank and state agencies-Investment Corporation of Bangladesh, House Building Finance Corporation and Security Printing Corporation (BD) Ltd.," he mentioned.
Gross abuse of state banks' cars has reached alarming proportions with some directors using the cars to run their errands, he added.
When asked how many directors of state banks and entities are misusing cars, he declined to make any comment in this regard.
In 2019, the central bank issued a warning to banks to avoid unnecessary expenses including purchase of luxurious cars and decoration of their branches, etc.
BB instructed banks to purchase sedan cars at Tk 5.0 million (Tk 50 lakh) and sport utility vehicle at Tk 10.0 million (Tk one crore).
The chairman of a bank would be entitled to get car facility from the bank while only entitled officials would also enjoy banks' car facility, according to the warning.
The cars which would be allocated for the managing directors/chief executives and chairmen for personal use shall be for five years.
When contacted, Managing Director of ICB Md. Abul Hossain said, "There are guidelines and policy in this connection. It has been mentioned in the policy who are entitled to get car facility and who are not."
"We are trying our best to follow the existing policy to use official cars," he added.
rezamumu@gmail.com