Friday, January 18, 2019

MK Alamgir denies involvement in troubled Farmers Bank irregularities

  • Parliament Correspondent,
    Published: 2018-02-13 02:11:31 BdST


Muhiuddin Khan Alamgir MP, who resigned as the Farmers Bank chairman recently following pressure over loan scams and mismanagement, has denied being involved with any irregularities in the troubled bank.

Speaking in Parliament on Monday, the ruling Awami League leader called these allegations ‘intentional’ and sought the Speaker’s protection.

A member of the Awami League’s Advisory Council, MK Alamgir served briefly as home minister in Sheikh Hasina’s previous cabinet.

He is the chairman of the parliamentary standing committee on public accounts now.

He founded the Farmers Bank in 2013 after the government cleared nine banks in a politically influenced move.

As the bank started struggling with irregularities of billions of taka within two years of launch, the Bangladesh Bank had posted an observer for the bank

In a report in October last year, the government said the Farmers Bank has created 'systematic risk' for Bangladesh's entire financial sector by taking loans with high interest rates from depositors and other banks while it does not have the capacity to repay.

Weeks after Alamgir resigned as chairman of the bank on Nov 27, Finance Minister AMA Muhith said, “The founders looted the bank. Bangladesh Bank is now taking care of it. It may take some time for the bank to recover from the crisis.”

Alamgir, who had remained silent at the time, raised the issue in Parliament to defend himself on Monday.

He said three newspapers published ‘false’ information. “They said I took commission personally before disbursing loans,” he said.  

“I’ve never faced such falsification in 77 years of my life. I had been in the management of Shilpa Bank, had worked as chairman of Krishi Bank and president of Shilpa Rin Sangstha, but no one could speak about my activities like they are doing now,” Alamgir said.   

The former bureaucrat was first elected to Parliament with the Awami League’s ticket in 1996. He had also worked as state minister for planning.

He was convicted of graft during the 2007-08 military-controlled caretaker government, but the High Court later acquitted him.

Alamgir brought the Bangladesh Bank accounts on Farmers Bank to parliament to respond to the allegations against him.

“According to a newspaper report, Tk 130 million was transferred from a client’s account to my one. Now see the accounts. Here’re the details of transactions of 10 days from July 17,” he said.    

“Such a crime (report) is an obstacle to creating a healthy environment in society. I seek your (Speaker’s) protection for establishing a healthy social environment,” the MP said.

He said the report ‘falsely’ accused him of clearing unauthorised loans when he was chairman of the bank.

“Such reports on speculations are also a barrier to maintaining order in the financial sector,” he said and again sought the Speaker’s protection.

He denied the allegation of irregularities in recruiting officials at the Farmers Bank.

The government report on the bank warned that its depositors may lose confidence in it for its activities.

It said the Farmers Bank was taking new loans violating a ban by the central bank.

The Farmers Bank had also admitted to the irregularities, the government said in the report.

According to the report on Farmers Bank, it loosened rules of disbursing loans and its internal control system soon after launch in 2013.

The irregularities identified in the report are:

>> Not following guidelines to disburse loans.

>> Giving loans to organisations that actually do not exist.

>> Giving loans to its directors and directors of other banks violating rules.

>> Giving loans against insufficient or faulty guarantees.

>> Giving a borrower more amount than the ceiling.

"The bank does not have the ability to repay its liabilities," the report said.