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Thursday, October 2, 2014

Wednesday, December 5, 2012
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At IMF push, central bank hunts for scam money

The lender slaps new condition of 'diagnostic exams' in state banks

Bangladesh Bank has opened a probe into the whereabouts of the Sonali Bank money embezzled by Hall-Mark Group, on advice from the International Monetary Fund.

The financial intelligence unit of the central bank will also see whether the amount has been siphoned off abroad or kept inside the country, said BB officials.

In the backdrop of big scams in different state banks, the IMF may tag a major condition of conducting special diagnostic examinations in those banks before releasing the third instalment of its $1 billion loan for Bangladesh.

A central bank official said they have launched the drive as the IMF and the Anti-Corruption Commission (ACC) have enquired about the money.

The Hall-Mark Group and some other businesses swindled about Tk 3,557 crore from Sonali Bank showing fake documents. Of the amount, Hall-Mark alone embezzled Tk 2,626 crore.

An IMF team, now in Dhaka, wanted to know from the BB what steps it has taken to realise the amount. The mission has also enquired about the scam involving BASIC Bank, the official said.

Since November 27, the IMF has been in talks with the central bank over the Hall-Mark issues.

The BB has already informed the global lender that it has sought information relating to the Hall-Mark Group from all banks, and as soon as the information will be available, those will be conveyed to the IMF.

On realising the embezzled money, the central bank told the IMF that Sonali Bank has already securitised a portion of the money swindled by the Hall-Mark Group by taking the Group's land as mortgage.

The BB also told the lender that the irregularities came to light first in a BB investigation and stern actions were taken against other banks where such irregularities were detected.

A total of 23 other banks were involved in 'bill purchase' by Hall-Mark Group from Sonali Bank's Ruposhi Bangla branch.

The BB has carried out a special investigation into the branches of those banks. Irregularities on the part of branch officials of some banks were found and those were referred to the anti-graft body for taking further actions.

In the context of various incidents of scams, the IMF has suggested massive reforms in the state-owned banks.

As part of the reform programme, the lender has advised the BB to conduct a special diagnostic examination of the state banks on their asset quality, liquidity management, internal audit and controls.

The government will make commitment to the IMF that it would carry out the special diagnostic examinations by March.

An official of the finance ministry said such reforms may be one of the major conditions for getting the IMF loan.

The BB itself made allegation to the government that some directors of the state banks were involved in the Hall-Mark scam.

The IMF now wants to know how the new directors are being selected and will closely watch whom the government appoints as directors.

However, the government will appoint the directors and senior management of the banks in line with the BB criteria.

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