The New Nation - Internet Edition

Staff Reporter

Bangladesh Bank (BB) is gradually loosening control on the banking system dictated by the personal interest of some of its officials in various banks and financial institutions, it is alleged.

The central bank often fails to be tough on irregularities or malpractices of scheduled commercial banks as the officials involved in the oversight functioning hope to join the banks after their retirement.

Sometimes the banks and Non-banking Financial Institutions (NBFIs) enjoy undue mercy or sometimes their misdeeds are overlooked, at the behest of these BB officials.

On retirement from the central bank, some high-ranking officials join private banks and finance companies as chairmen, advisers, or members of the board of directors.

A number of institutions, the Bangladesh Bank oversees, are run by or staffed by family members of central bank officials, sources said.

The training institutes, fund management and foreign exchange wings of some private commercial banks are staffed by retired central bank officials, who have allegedly been rewarded for their previous favours to the concerned banks.

Though, rules do not bar central bank officials from join private financial institutions or banks, the option for future gain may sometimes weaken their morale to take stern action against a bank, a general manager of state-run Sonali Bank told the New Nation.

These factors are weakening the central bank's regulatory authority over the banking system, an official of the central bank said on condition of anonymity.

The mechanisms of checks-and-balances are becoming weak, as these kinds of practices are creating scopes for corruption, he added.

There are several cases of top central bank officials accepting lucrative job offers from private banks, either after their retirement or by resigning from his prestigious posts.

Muhammad A Ali Rumee, former Deputy Governor of Bangladesh Bank, is now acting as Chairman of BRAC Bank Limited.

Former Executive Director of BB Asaduzzaman Khan has joined as Managing Director of Industrial and Infrastructure Development Finance Company (IIDFC).

Three retired bankers, who acted as Managing Directors of Islami Bank, Pubali Bank and National Bank Ltd, were also top-level officials of Bangladesh Bank earlier.

A former General Manager of Bangladesh Bank is now working for the Anti-Money Laundering Department of Prime Bank Limited.

A former joint director of BB and two former deputy general managers of BB secured jobs with City Bank (NA), Standard Chartered Bank and Mutual Trust Bank Ltd respectively.

Many other private banks and NBFIs have staffed some of their key-posts with retired BB officials.