BB fines three banks for regulations breach

Bangladesh Bank slapped fines on state-run Agrani Bank, private commercial Mutual Trust Bank and One Bank for violating its regulations.

The banks applied to BB to waive the penalty. BB discussed the issue in its 417th meeting, presided over by Governor Fazle Kabir, on Monday.

“BB rejected the applications in its board meeting and now, the banks will have to pay the penalty,” said BB Executive Director and spokesperson Md Serajul Islam.

He, however, he did not mention the figure of the fines. 

Section-109 of the Banking Company Act-1991 says that anyone holding back or providing false information or documents can be jailed for a maximum of three years and fined.

A senior BB official said that the central bank could impose a fine of maximum Tk 10 lakh for such violations. 

Agrani Bank hid the credit information of Rupa Shipping Lines Ltd; Taher Apparels Ltd and Unique Meghnagat Power Ltd in the CIB (Credit Information Bureau) report, BB said in a statement.

Agrani Bank Managing Director and CEO Mohammad Shams-Ul Islam said they did not intentionally hide the credit information. “It is late to report to the CIB about credit information because our LC (letter of credit) activities are manual but we are working on upgrading the system,” he said.

Islam said that the state-run bank informed Bangladesh Bank of the matter and applied for a waiver of fine.

Private commercial Mutual Trust Bank concealed the credit information of Mamun Enterprise in the CIB report. Its Managing Director Syed Mahbubur Rahman said that in 2019, the central bank had asked them to classify the loans of a client. 

“But classifying the loans took some extra time due to various processes. That’s why BB’s imposed the fine,” he said.

On the other hand, One Bank had declared cash dividends violating the banking law as it had not maintained its provision against loan losses. The lender did not take prior approval from the BB for declaring dividends. And, then the BB asked the bank to change the balance sheet for the year 2020. 

One Bank Managing Director M Fakhrul Alam said that the central bank imposed penalty because of a simple matter. BB asked us to change the balance sheet for the year 2020 but Bangladesh Securities and Exchange Commission’s approval is needed for that.  

“However, BSEC did not allow us to change the balance sheet as it is price sensitive information,” said Alam.