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Corruption fest at Farmers Bank

ACC is hesitant about top notches

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Staff Reporter :
The Anti-Corruption Commission (ACC) is yet to open any investigation into the gross irregularities of Farmers Bank and bring to light the loan scandals resorted to by its former chairman Dr Mohiuddin Khan Alamgir.
In four years since the bank was set up, it plunged into a severe liquidity crisis and reports said the former chairman used his absolute control over the bank as the lead sponsor to fund mismanagement. The bank took deposits from various sources at high interest rates only to sanction loans to people in Dr Mohiuddin Khan Alamgir's closer circle and his own business in deceitful ways without credible collateral against credit risks.
It was almost a high corruption fest in Farmers Bank as observers watching the development said the former chairman openly defied warnings by central bank to restraint from such misuse of power and depositors' fund as he wishes.
The turn-coat bureaucrat cum politician whose latest venture was involving the banking sector to make illegal fortune even sued Bangladesh Bank (BB) in the High Court when it fined Farmers Bank for gross irregularities.
BB earlier detected Tk 400 crore loan scandals at Farmers Bank while conducting inspections on the Bank.
As chairman of Parliamentary Committee on Public Accounts, he misused power to bring pressure on BB to drop the fine while continued violating banking rules. Civil society leaders such as Executive Director of Transparency International Bangladesh Dr Iftekharuzzaman, former BB governor Dr Salehuddin Ahmed, Executive Director of Policy Research Institute Dr Ahsan H Mansur have laid emphasis on immediate corruption probe by ACC to save the bank and punish the persons responsible for swindling bank deposits.
They believe the central bank should immediately appoint an administrator at the bank to stabilize it while taking steps to merge it with others.     
According to BB disclosure, former chairman of Farmers Bank Dr Mohiuddin Khan Alamgir violated lending rules and made loan to business projects against fake documents.
Alamgir, a ruling party MP and former Home Minister, rented space for setting up new bank branches from Bank Directors at high rates and recruited new bankers from party even before the bank was formally launched.
Even he opened seven branches at his own constituency on political consideration and gave jobs to party men to win loyalty. These are all gross violation of banking rules resulting into the big plunge in the bank in term of spiralling of bad loans without recovery to create the big liquidity crisis.
Many believe it is a replication of BASIC Bank scam in a smaller scale before the bank could grow enough. Executive Director of Transparency International, Bangladesh, Dr Iftekharuzzaman told The New Nation yesterday that a high level corruption has taken place in the bank and the ACC should open investigation into the matter to find out lost money and punish the culprits.
He said the ACC has already launched crackdown on some dishonest bankers. But no measure is yet in sight to bring Farmers Bank Board Members under scanner. "Influential people are often-stealing money from bank with impunity as ACC is failing to put them on the dock. We hope the Commission will soon form a probe body to look into the scandals," he added.
The bank is now failing to repay deposits from individuals and public funds creating panic at all levels forcing it to ask the central bank to sanction bail out funds to stay in business.
Dr Mohiuddin Khan Alamgir (MKA) was recently forced to resign as chairman of Board of Directors of Farmers Bank and its Executive Committee on pressure of the central bank.   Mahabubul Haque Chisty, a powerful director and Audit Committee Chairman of the bank, also stepped down as per the directive of BB. Chisty got directly involved in Tk 50 crore loan scam within one year of its operations.
BB also removed AKM Shamim, Managing Director of the ailing bank, for failing to protect interest of the depositors violating the guidelines of the central bank.
Dr Ahsan H Mansur believes the central bank should take over the bank immediately to protect depositors' interest. It should appoint an administrator to look into the matter. Meanwhile, the ACC should launch investigation against corruption.
Dr Salehuddin Ahmed blamed BB for delayed action against Farmers Bank. It could take timely actions to stop loan irregularities. "Legal action should be taken against the bank directors for mismanagement and corruption in administering the bank," he added.
Dr Mohiuddin Khan Alamgir could not be reached for comment despite several attempts on his cell phone. His phone was found switched off.

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