Based on the findings of the probe the central bank will take punitive measures against the bank officials who sanctioned the irregular loans and the borrowers who received those, a BB source said.

The takeover of full control of Oriental by the central bank and appointment of a new administrator for the bank had an instant positive effect on the share market. Oriental's share price rose 32 percent yesterday. Over the last few months its share price had been consistently declining. Even on Monday, Oriental's share price dropped nine percent as the central bank was undecided over what it would do about the problem bank.

BB Governor Salehuddin Ahmed yesterday expected that Oriental will soon come out of its existing problem as the performance of the bank recorded yesterday was healthier.

He made the comment while he was answering to questions from journalists at a programme of Dutch-Bangla Bank Limited at Hotel Purbani International in the capital.

The central bank has no plan to takeover full control of any other bank right now, the governor said adding that although it is monitoring financial situations of a few other banks as well.

Banks that still have poor records can come out of the situation through their own initiatives, as some other banks did so in the past without any external interference, the governor said citing the example of City Bank.

Murshid Kuli Khan, the BB appointed new administrator of Oriental Bank, had a busy first day at the bank's head office at karwanbazar. Throughout the day he talked to managers of branches outside Dhaka over the telephone while in the afternoon he took time to have a meeting with managers of different branches in Dhaka.

The managers informed the administrator that the depositors' faith on the bank returned again. They also informed him that there had been no abnormal withdrawal by the clients in their branches. One of the clients having a fixed deposit in the bank in fact showed interest yesterday to deposit more money although the bank is going through a transition period.

Earlier on Monday, the BB served show cause notices to the chairman and other members of the now defunct board of directors of Oriental Bank and to its freshly withdrawn managing director asking them to reply within seven days, and simultaneously made their removal effective on the same day.

Inspection teams from BB's head office were sent to different branches of Oriental in Dhaka yesterday while teams from BB's regional offices were asked to inspect the bank's branches outside Dhaka.

The investigation teams will probe into the loan sanction process, especially regarding who were provided with loans, whether those were sanctioned against real or fictitious names as well as what types of other irregularities were committed.

A BB official said their main job will be to identify the 'breach'. He also said those found guilty will have to face criminal charges.

The investigating team will review what measures were taken against the top twenty loan defaulters in each of Oriental's branches and if the actions taken against the defaulters are found to be inadequate, the central bank will ask the Oriental's administration to take additional measures against the defaulters.

Oriental happens to be the first commercial bank which is in such a dire situation. A BB official said they took the issue very seriously as the interest of the banking industry is associated with it. He also said the government signalled the BB to do everything it deems fit as the government had realised that troubles in the banking sector may have a serious effect on the economy and it does not want to put the sector into difficulties for the sake of a few individuals.

The Bank Company Act allows the BB to keep Oriental under its command for two years after the legal procedure concerning the show cause notices comes to an end. BB officials hoped that they will be able to restructure the bank within the stipulated time and turn it into a sound financial organisation.