The Bangladesh Bank (BB) dissolved the board of National Bank PLC– the country’s first generation private sector bank – on Tuesday for the third time.
In a notification issued by BB Governor Ahasan H Mansur with the immediate effectiveness of the decision, the banking regulator said it has dissolved the bank's board for the sake of the depositors' money and public interest.
The bank’s board has long been mired in allegations of lacking good governance, failure to disburse loans, and inability to preserve deposits, according to BB.
Earlier, BB dissolved and restructured the board of directors of National Bank for the first time in December last year, but dissolved that board again in May this year for the second time.
The central bank has formed a new seven-member board including three directors and seven independent directors.
Among them, three are shareholders of National Bank, two are former bank officials, one is a teacher, and one is a chartered accountant.
The three directors are shareholders of the bank: BNP leader, former president of Federation of Bangladesh Chambers of Commerce & Industries (FBCCI) Abdul Awal Mintoo, Moazzem Hossain and Zakaria Taher.
Independent directors are former Bangladesh Bank executive director Md Zulkar Nain, Shimanto Bank PLC former managing director Mukhlesur Rahman, Professor of IBA at Dhaka University Melita Mehjabeen, and Chartered Accountant Md Abdus Sattar Sarker.
Md Zulkar Nain told The Business Post, “We will discuss about the plan of actions at the first meeting of the new board. But as we all know, there have been many irregularities in the bank. New board will take initiates to remove the irregularities and work on creating public trust.”
He added that National Bank’s financial health is poor because of a large number of defaulted loans.
According to the Bangladesh Bank data, the amount of defaulted loans of the bank stood Tk 13,514 crore at the end of September 2023 and capital shortfall of Tk 2,024 and earnings per share was negative Tk 3.49.
The bank has incurred a huge loss in 2022, amounting Tk 5,527 crore. There is no available latest annual report of the bank in its website.
National Bank was controlled by the Sikder Group since 2009, which was a close tie with the Hasina regime. This led the Sikdar Group to be in power to make any changes in the Bank Companies Act. That included an introduction of appointing four directors from a same family instead of two.
