11 more banks to face asset quality review
Eleven more banks that were hit by irregularities and scams during the Awami League government's tenure are set to undergo an asset quality review (AQR) by global audit firms.
Bangladesh Bank Executive Director and spokesperson Areif Hussain Khan confirmed the matter to The Daily Star, but he did not disclose the names of the banks.
For all latest news, follow The Daily Star's Google News channel. Central bank officials, seeking anonymity, said the eleven banks are Islami Bank Bangladesh, Al-Arafah Islami Bank, National Bank, Bangladesh Commerce Bank, United Commercial Bank, IFIC Bank, AB Bank, Premier Bank, NRB Commercial Bank, NRB Bank, and Meghna Bank.
The banking sector reform task force made the decision to conduct the review at a meeting yesterday at the central bank headquarters.
The World Bank will provide support for the review.
The newly formed Bank Restructuring & Resolution Unit is now working on this issue.
To ensure a proper audit, Bangladesh Bank has assigned a dedicated official as a focal point for each bank, BB officials said, adding that each audit firm will also have a designated official responsible for the task.
Central bank officials said that the issues to be included in the AQR process have been specified. These include financial policies, asset risk and valuation, internal control policies, loan classification, and rescheduled loans, they added.
In addition, the policies related to single borrowers and large loan limits, major defaulting borrowers, and the assessment of accounting policies and internal control systems of banks to reduce other credit risks will be reviewed. Liquidity and investment policies will also be evaluated in line with existing regulations.
When contacted, Omar Faruk Khan, Managing Director (current charge) of Islami Bank Bangladesh, told The Daily Star that it sent a representative when the central bank called the bank regarding the issue earlier in the day.
However, he added, the bank was not yet aware of the decision made at the task force meeting.
Earlier, global audit firms Ernst & Young and KPMG completed the AQR of six banks.
Ernst & Young conducted asset assessments for EXIM Bank, Social Islami Bank, and ICB Islamic Bank.
KPMG carried out the assessments for First Security Islami Bank, Global Islami Bank, and Union Bank.
These banks are among those frequently named for various irregularities and fraud during the previous government's tenure.
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