SEC slaps Tk 100m fine on AB Bank
Monday, 18 February 2008
FE Report
The securities regulator of Bangladesh has slapped a fine of Tk 100 million (10 crore) on the merchant banking wing of AB Bank for violation of merchant banking rules in disbursing loans.
The bank in the recent past disbursed more than Tk 5.0 billion (500 crore) exposure loans, eight times its total paid-up capital to relatives of a section of officials working with the bank in violation of the merchant banking rules, a spokesman of the Securities and Exchange Commission (SEC) told reporters Sunday.
Under the existing rules, a merchant bank is allowed to disburse exposure loans five times its total paid-up capital. During the period when the bank flouted the SEC rules, its total paid-up capital was Tk 570 million.
The fine, the highest ever against any merchant bank in the history of the SEC since 2001, will have to be deposited to the commission in bank draft or pay order within 15 days from Sunday.
"This is the first such fine the SEC has slapped so far on a merchant bank for the sake of market discipline, transparency and public interest," said SEC executive director Farhad Ahmed.
The SEC will take tough action, if the bank fails to pay the fine within the time set, he added.
The securities regulator of Bangladesh has slapped a fine of Tk 100 million (10 crore) on the merchant banking wing of AB Bank for violation of merchant banking rules in disbursing loans.
The bank in the recent past disbursed more than Tk 5.0 billion (500 crore) exposure loans, eight times its total paid-up capital to relatives of a section of officials working with the bank in violation of the merchant banking rules, a spokesman of the Securities and Exchange Commission (SEC) told reporters Sunday.
Under the existing rules, a merchant bank is allowed to disburse exposure loans five times its total paid-up capital. During the period when the bank flouted the SEC rules, its total paid-up capital was Tk 570 million.
The fine, the highest ever against any merchant bank in the history of the SEC since 2001, will have to be deposited to the commission in bank draft or pay order within 15 days from Sunday.
"This is the first such fine the SEC has slapped so far on a merchant bank for the sake of market discipline, transparency and public interest," said SEC executive director Farhad Ahmed.
The SEC will take tough action, if the bank fails to pay the fine within the time set, he added.