A BASIC Bank board member has recently raised questions about the managerial style of the government-appointed chairman at the organisation and his handling of allegations of financial irregularities.
This is the first time a board member has come forward to expose imprudence in the running of the state-owned bank. The bank has been under the spotlight ever since scams by some of the bank's branches of Tk 4,000 crore were made public.
"The chairman [Sheikh Abdul Hye Bacchu] regards himself as all-in-all of the bank,” AKM Rezaur Rahman, a board member and also a former secretary, said in a letter to the banking division of the finance ministry last week.
Bacchu conducts board meetings for only 20 to 30 minutes, during which he flips over more than 100 memos containing 500-600 pages each and gives decisions, said Rezaur, adding the chairman was always in a rush to wrap up the meetings.
Rezaur also wrote about how Bacchu had responded to a letter from the central bank enquiring about the board's approval to 13 loans.
The letter from Bangladesh Bank was presented at the April 30 board meeting as an information memo. "But the chairman said,'There is no need to discuss it [the issue] and moved on to the next agenda'," Rezaur said.
He said he had insisted on an elaborate discussion of the matter since he deemed it to be a “very important issue and not a mere piece of information”.
The board took the decision on the 13 loans at a meeting in October last year, in which he was not present, Rezaur said, adding the loans got approved because of Bacchu's apathetic management style.
“Although disbursement of the loans had been put on hold following instructions from the Bangladesh Bank, I still expressed surprise at how the board could approve loans without following due procedures.”
In response, the chairman asked the managing director of the bank to be careful to avoid recurrences of such events.
As is the practice in the banking sector, at the beginning of every board meeting the chairman is supposed to give a brief of the discussion of the previous meeting, but Bacchu, allegedly, never does it.
"As a result, there remains no scope to check what decisions have been taken in the previous meeting and what steps are being taken to act on them."
Moreover, the agenda of the meeting along with bundles of papers are distributed only on the eve of a board meeting, leaving the members with inadequate time to properly go through them.
“Consequently, the board members don't get the scope to play an active role in the running of the bank.”
Bacchu, although involved with the HM Ershad-led Jatiya Party, is said to be always boasting of his rapport with the prime minister. “He says he does not care about anybody other than the prime minister."
Rezaur said the chairman uses the bank's budget for corporate social activities at his own discretion, not by following the guidelines.
Regarding BB's demand that a memorandum of understanding (MoU) be signed to improve transparency and accountability at BASIC Bank, he said, “The bank's managing director is against the signing of the agreement as it will create problems in the running of the bank.”
"The chairman spoke of consensus, and proposed that the bank seek time from the central bank to analyse the MoU."
Rezaur in his letter, however, said most of the board members did not have objections to the managerial style of the chairman.
Irregularities at BASIC Bank, said to be one of the best state-run banks, were exposed by media reports in recent months, which prompted discussions in parliament.
A central bank inspection last year detected scams involving over Tk 4,000 crore in some of the bank's branches. In another separate event, the commercial audit department of the Office of the Comptroller and Auditor General found 17 instances of financial irregularities at the bank's headquarters in 2012.
"Following reports in the media and letter from the central bank, it seemed to me that there is authenticity in the allegations," Rezaur wrote.
Neither Sheikh Abdul Hye Bacchu nor BASIC BANK Managing Director Kazi Faqurul Islam could be reached.
AKM Rezaur Rahman declined to make any further comment to The Daily Star.
Bacchu was appointed chairman of the bank soon after the present government assumed power in January 2009. His tenure was extended by two years last September.