BB gives three months to wrap up AB Bank Foundation activities
FE Report | Monday, 14 July 2008
Bangladesh Bank (BB) has asked AB Bank to wrap up all the activities of its subsidiary AB Bank Foundation within the next three months for its alleged violation of the existing Bank Companies Act.
The central bank has also ordered the authorities concerned to confiscate the entire shares of IFIC Bank that the AB Bank Foundation is currently holding violating the existing rules and submit the same to the BB.
According to the rules, any company or individual can hold maximum 10 per cent shares of a company. But the AB Bank Foundation was holding more than 18 per cent shares of the IFIC Bank and then sold around 12 per cent of them keeping 6 per cent in hand, a BB investigation found.
'We have sent a letter today (Sunday) to the AB Bank authorities asking it to close the activities of the AB Bank Foundation within next three months following its violation of the existing rules,' a senior BB official told FE.
The central bank's investigation revealed that the AB Bank established the AB Bank Foundation without following the proper rules and regulations as the same people are owning these two institutions, which is contrary to the related laws.
The central bank has also ordered the authorities concerned to confiscate the entire shares of IFIC Bank that the AB Bank Foundation is currently holding violating the existing rules and submit the same to the BB.
According to the rules, any company or individual can hold maximum 10 per cent shares of a company. But the AB Bank Foundation was holding more than 18 per cent shares of the IFIC Bank and then sold around 12 per cent of them keeping 6 per cent in hand, a BB investigation found.
'We have sent a letter today (Sunday) to the AB Bank authorities asking it to close the activities of the AB Bank Foundation within next three months following its violation of the existing rules,' a senior BB official told FE.
The central bank's investigation revealed that the AB Bank established the AB Bank Foundation without following the proper rules and regulations as the same people are owning these two institutions, which is contrary to the related laws.