The central bank's legal department also appointed four senior lawyers to initiate legal proceedings for overturning a last moment High Court stay order on the bank's Central Information Bureau's (CIB) identification of 32 candidates as loan defaulters including an Awami League (AL) leader, Salman F Rahman.

Salman, however, withdrew his nomination paper as part of his party's decision to boycott the January 22 polls.

"We have seen that a number of candidates in the upcoming polls were declared fit by the retuning officers although they had defaulted on loan repayments to different banks," said a senior officer of the central bank. He said a four-member probe committee was formed last week with the central bank's Executive Director Khurshid-ul-Alam as the chief.

"The committee will detect the lapses within the central bank that led to allowing such loan defaulters to participate in the polls," the official said preferring anonymity.

Amardesh Publications Limited, of which Mosaddek Ali Falu is one of the major shareholders, took loans from Oriental Bank, a source in the bank said.

He said, "The loan was later transferred to five fictitious companies Elegant Traders, United Traders, Ahmed Brothers, Tarek Timber and Furnisher House, and KB International with guarantees from Falu and his brother Hasmat Ali."

"United Traders and KB International, from the five companies, have already been identified as defaulters of loans amounting to Tk 14 crore," he added.

A source in the BB said the loans of Amardesh Publications were transferred to the five companies illegally and none of these companies has any trace at all. "The companies now owe around Tk 31.5 crore to Oriental Bank," the source added.

Oriental Bank sent a report to the central bank in the first week of December stating that two of the five companies had defaulted on loan repayments -- of which Mosaddek Ali Falu is one of the two guarantors.

But the Bangladesh Bank did not raise any objection against Mosaddek Ali Falu's candidacy in the upcoming election during the process of scrutinising his nomination papers.

"The central bank, however, sent an objection to the returning office against Falu's candidacy at the very end of the scrutiny period describing that Oriental Bank had identified him as a loan defaulter," a source said. The letter however did not have any alerting effect on the returning office.

"We could not send the papers to the returning office on time as we had to check the loan status of around 5,000 candidates in a short period of time," a BB official said.

After the period of scrutinising nomination papers was over, the loans were transferred back again to Amardesh Publications on December 30, the last working day before the Eid vacation, and Tk 1.60 crore was deposited as a down payment for rescheduling the loans. "Besides, a privately owned two bigha land in Dhaka city was used as collateral against the loan," the source said.

Meanwhile, the central bank detected that at least 32 loan defaulting candidates got stay orders from the High Court against declaring them as loan defaulters right before the deadline for filing nomination papers ended.

The legal department of the central bank last week appointed senior advocates Khan Saifur Rahman, Barrister Shafiq Ahmed, Barrister Shameem Khaled Ahmed, and Habibul Islam Bhuiyan to initiate legal proceedings for overturning the High Court stay order on declaring the 32 electoral candidates as loan defaulters.

The loan defaulting candidates also include Dr HBM Iqbal, AFM Faqrul Islam Munshi, Shafi Ahmed Chowdhury, Mohammad Ali, Golam Sarwar Milan, Alamgir Shamsul Al-amin, and AKM Maidul Islam.

Many of these 32 defaulters defaulted on loan repayments to more than one bank and secured stay orders for more than one delinquent account.