New era | NRBC Bank punished for violation of rules

Bangladesh Bank has imposed a fine of Tk 5 lakh on NRBC Bank over the private commercial bank’s inability to report suspicious transactions by a customer and ordered it to take disciplinary action against officials concerned for their failure to discharge their duties and for providing false information.

The central bank also directed NRBC Bank to investigate the role of several officials, including the branch manager, the branch’s anti-money laundering compliance officer, the bank’s chief AML compliance officer and others responsible for supervision during the period from May 18, 2021 to 2021. April 7, 2022.

The central bank informed the director of NRBC Bank about these actions on October 20.

According to the central bank report, NRBC Bank client Md Rezaul Bashir, with an account at the bank’s R Nizam Road branch, had carried out suspicious transactions during the period.

Although NRBC Bank identified these transactions as potentially illegal, it failed to timely report them to the Bangladesh Financial Intelligence Unit, thereby violating the Money Laundering Prevention Act of 2012.

If the fine is not paid within seven days, the Bangladesh Bank will debit the amount from NRBC Bank’s current account at the central bank.

The BB asked the bank to take disciplinary action against those involved and to report the measures it took to the central bank within 30 days.

Director Md. Rabiul Islam of NRBC Bank did not respond to requests for comment on these matters.

The central bank also found that NRBC Bank had misled it by claiming that it did not have national identification details of sponsor director Abu Bakr Chowdhury.

However, upon inspection of a BB, it was found that his NID had been attached to documents relating to Baizid Industries Limited, which he owns.

Consequently, the BB issued a show-cause notice asking all directors, including Abu Bakr, along with the Managing Director, Company Secretary and other concerned staff, to explain within 14 days why no disciplinary action should be taken are taken.

The BB report states that NRBC Bank also provided conflicting information about the shareholder position of its sponsor directors.

The bank reported that sponsor directors currently held 68 percent and general shareholders 31.94 percent of the bank’s shares, which did not match data provided to a BB inspection team on January 1, 2023.

The BB directed the bank to reduce the shareholding of non-resident Bangladeshi sponsor directors to 50 percent within six months, warning that failure to comply with the direction would constitute an offense under the Bank Company Act 1991.

Further, the BB demanded a comprehensive report on reclassification of sponsor shareholders from non-resident Bangladeshi to resident status within 30 days, along with documentation.

Due to failure to comply with license condition No. 4 and showing inefficiency and negligence, the BB ordered the bank to impose disciplinary measures on officials of the relevant department and report compliance within one month.

According to a 2022 report by the Financial Integrity and Customer Service Department of Bangladesh Bank, there were numerous allegations of corruption, money laundering and recruitment activities against a number of board members and top management of NRB Commercial Bank, especially its chairman Parvez Tamal.

The BB inspection team found in 2022 that Parvez and eight other directors were directly involved in the recruitment activities as their company, NRB Management Ltd, recruited a total of 3,714 people from NRBC Bank between January 2021 and April 2022, which was a conflict of interest. .

NRBC Management Limited charged around Tk 11.19 crore as service charges during the period.