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The state-run bank did not create loans against the import bills paid in the name of the 11 client between July 2017 and July 30 this year
State-run Rupali Bank has given about Tk 350 crore to 11 clients by violating the central bank’s risk management guidelines.
Between July 2017 and July 30 this year, the local office of the state-run bank has paid a total of Tk 341.4 crore as import bills to foreign companies on behalf of the clients, according to a document of the bank, which Dhaka Tribune has a copy of.
The facilities were provided to the clients against a total of 119 letters of credit in three years. The amount has now crossed Tk 350 crore.
But the bank has yet to create any loans against the 11 clients: Bashundhara Paper Mills, AA knitting, Julfikar Fashion, Mother Textile, Badar Spanning, ABS Garments, Beacon Pharma, Western Engineering, BD Thai, Sister Denim composite and MK Footwear, as per the document.
Banks will have to create loans in the name of the client on the day of the payment of import bills on behalf of its client, according to the risk management guidelines of the central bank.
“This is a big irregularity of a bank. Banks will have to keep provisions against the unadjusted amount,” said a high official of the Bangladesh Bank with much knowledge on the matter.
Rupali’s treasury department has issued the equivalent advice of import bills to the local office after paying from its nostro account but the local office did not respond to it until August 26 this year, as per the document.
As a result, the figure remains unadjusted.
The companies have already imported their raw materials and machinery and gone into production.
But they are yet to pay a single penny to the bank, said an official of the bank seeking anonymity as he is not authorised to speak with the media.
Some officials of the local office were directly involved in the irregularities, the official said.
Of the total amount, Bashundhara Paper Mills owes the highest: Tk 126.9 crore.
It is followed by AA Knitting at Tk 55.16 crore, Badar Spinning at Tk 24.97 crore and Mother Textile at Tk 18.73 crore.
Mohammed Shawkat Jahan Khan, the chief financial officer of Rupali, acknowledged the matter.
He said that the bank is in the process of creating loans against the clients.
Most of the LCs were from recent times, he said. adding that the central bank’s approval is needed to create loans against the clients.
Besides, the board’s approval is needed.
“That’s the reason for the delay.”
Besides, the clients are going through a difficult situation amid the pandemic, Jahan added.
At the end of September, Rupali’s default loans stood at Tk 4,102.5 crore, which is 13.85 per cent of its total loans, according to the central bank latest data.
The bank faced a provisioning shortfall of Tk 859.89 crore and a capital shortfall of Tk 213.36 crore.
(DT)
