The newly appointed board of National Bank PLC (NBL) will scrutinise all waived and written-off loans and interests, regardless of whether they were justified or not. The board will also evaluate all violations of banking norms and laws that occurred in the past 15 years.

Abdul Awal Mintoo, the newly appointed chairman of the bank, made this comment to The Daily Star in an interview on Wednesday (August 4).

He has already ordered the bank management to provide a complete list of written-off loans since 2010. These loans were written-off from the bank's books, but the clients still owe the money.

A list of all waived interest and principal amounts has also been sought. The board will evaluate each item to determine its justification, he said.

The management has asked to submit a list of instances where the bank violated rules and banking norms, even if the central bank granted special permission.

I can assure you that every defaulter will be pursued with the maximum force of law. No one will receive any favours from NBL.

— Abdul Awal Mintoo Newly appointed chairman of National Bank

"Everything [irregularities] will be reversed," Mintoo said.

"I can assure you that every defaulter will be pursued with the maximum force of law. No one will receive any favours from NBL," said Mintoo, who was previously the bank's chairman before the Sikder family took control of the board.

NBL was the first private commercial bank in Bangladesh, having begun its commercial operations back in 1983.

"I hope the current government will ensure that all loopholes in the legal process are closed so that defaulters cannot exploit them," Mintoo said.

Recently, the central bank dissolved the previous board of NBL to protect the interests of depositors and appointed several new directors, including Mintoo.

The bank's newly appointed board members elected Mintoo, a businessman and vice-chairman of the Bangladesh Nationalist Party, as chairman of its board of directors.

"Our main target is to change perceptions about the bank and build trust. To do this, we need the help of the central bank," Mintoo said during the interview.

Two photo frames -- prominently displayed side by side on a wall of his office -- show Mintoo with two former prime ministers: Sheikh Hasina and Begum Khaleda Zia. He is also the former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

Mintoo completed his BSc and MSc degrees from the Maritime College, State University of New York. In 1982, he left his international shipping career and returned to Bangladesh.

He said that during the last 15 years, while the bank was being corrupted, he tried to speak out. But the Sikder family, having taken control of the bank, prevented others from speaking and the central bank supported them.

"Many managers were beaten by the Sikder family to follow their unlawful orders, and the central bank was aware of this," Mintoo said. "Despite that, the central bank allowed the family to maintain control of the bank."

"In my judgement, the Bangladesh Bank has an obligation to provide support for three reasons: for the sake of the country's economy, for the sake of depositors and for the sake of customers who are involved in production. They are the lender of the last resort," he added.

"I don't want the central bank to print money for us. It can create a money instrument for the bank, but this is only for the very short term," Mintoo said.

If the central bank provides the bank with Tk 8,000 to Tk 10,000 crore, the bank will return around Tk 6,500 crore to fulfil the cash reserve ratio (CRR) and statutory liquidity requirement (SLR). The remaining funds will be used to address normal cash flow deficits.

Mintoo hoped that the bank would not require further support after six months.

Within the next six months, the bank will sit with all defaulting clients. Some may face legal action, while others will begin repaying under effective negotiations.

"I am confident that NBL will be able to return all the deposits that were withdrawn in the last several months," Mintoo said.

In 1984, at the age of 32, Mintoo joined the board of directors of the bank. He later served as the chairman of the bank before leaving the board when his term expired, abiding by banking regulations.

Mintoo always had a shareholding in the bank but was not interested in rejoining the board.

"Serving on the board cannot add value to me, but it can add value to those who steal money," he said. "But I want to add value to the bank, so I accepted the responsibility."

Mintoo said the central bank should provide support because it dissolved the bank's board with good intentions and selected him by its own choice.

Upon joining the bank, he found a negative cash flow and a reduction in deposits of around Tk 7,000 crore amid several negative news reports about the bank.

High default loans have caused the bank's interest payments to exceed its interest earnings. As deposits have declined, the advance deposit ratio has risen above the ceiling, leading to imbalances in most indicators.

The bank is unable to offer other services, such as LC opening, due to margin restrictions by the central bank. This has also affected its income from other businesses.

According to the bank's first-half financial reports for 2024, its net interest income was a negative Tk 792 crore. The net loss for the first half was Tk 1,066 crore, compared to Tk 620 crore in the same period of the previous year.

After the Awami League took power, some family-owned groups gained control of several banks. After capturing the boards of these banks, these groups began barter trade-style lending.

"For example, a director might say 'you will give me a Tk 1,000 crore loan from your bank and my bank will lend you the same amount'," Mintoo explained.

These groups also agreed to waive interest on each other's loans, leading to a few banks becoming stuck in this type of banking practice.

Among these banks, NBL was in the worst situation due to widespread corruption.

Sikder Group was involved in barter lending using the bank, and they have taken money from the bank illegally. The bank bought some assets at a high price from several parties, which are ultimately linked to the family.

For example, the existing head office of the bank belonged to a group. NBL gave a loan to that group to construct the building, and it sold the structure at a higher price than the market value.

This group sold it to one of the sons of the Sikder family and he rented it to the bank at a higher price than the other buildings nearby. So, the bank was used for the benefits of the family while the commercial lender was the ultimate loser, Mintoo said.

There are several other examples of such activities, he said, adding that the bank's cost is around Tk 24,000 per square feet for the building situated at Kawran Bazar circle while its cost may be Tk 5,500 at maximum.

On top of that, the bank needed some more spending to make the building usable, according to Mintoo.

Actually, they have just taken away the rest of the money as Sikder Group is the actual contractor of the building in the name of a foreign company, he said.

They have invented thousands of ways of stealing money from the bank, he said, adding that they have taken money from every purchase of the bank, causing the bank's operating costs to soar.

"The bank bought a space in Gulshan at around double the real price. Now we have found out that this family also bought space in the same building," he said.

So, it is clear that they bought the space with the bank's fund, Mintoo added.

In just one meeting, the Sikder Group-controlled bank waived Tk 2,700 crore of interest payments of a group. And its impact is much higher as the money was shown as interest income in the financial reports, violating banking norms.

To deceive shareholders, the bank showed the due interests in the interest income. As it was shown as income, the bank had to pay 40 percent income tax to the government, and they also paid the dividend.

So, its impact was Tk 4,800 crore on the bank, he said.

"If we say that there were irregularities in the bank, it would be underestimated, it was actually robbed."

Most importantly, everything was done in the bank, be it giving loans, interest waivers or loan write-offs, it was done either with the permission of the Bangladesh Bank or with the knowledge of the regulator.

"And it [the regulator] has not taken any action against them," Mintoo said.

Mintoo was elected president of the Federation of Bangladesh Chambers of Commerce and Industry in 1998 for the first time and re-elected in 2003. He is the author of several books, including "Bangladesh: Anatomy of Change".