Agrani Bank fined for inaction over Dolly Construction’s loan irregularities
The Bangladesh Bank has fined Agrani Bank Tk2 lakh for not taking action over Dolly Construction Limited's loan irregularities despite the passage of 10 months since issuing directives to the state-owned lender.
The construction firm had taken a Tk140.13 crore loan from the bank till November 2020 against two work orders of the Bangladesh Water Development Board (BWDB) totalling Tk328.36 crore, the central bank mentioned in a letter to Agrani Bank.
The firm must complete 85.35% of the work orders – equivalent to Tk280.26 crore – to receive this amount as per rules. By that time, however, it had only completed 35% of the work orders, the letter added.
The rules allow the company to receive a maximum of Tk57.46 crore from the bank for the portion of work completed. As such, it had irregularly received an additional Tk82.54 crore.
According to the Bangladesh Bank, the two work orders expired on 15 April 2021. Also, the extended term of the loan taken from the bank expired on 6 June 2021.
Despite the expiration of the deadlines, Dolly Construction is yet to repay the loan of Tk104.50 crore with interest.
In addition, Agrani Bank approved an overdraft limit of Tk100 crore against a work order for the Riverbank Conservation and Development (Phase II) project under the Water Development Board.
But the construction firm took the money against a different work order which is a clear violation of bank company rules, the central bank mentioned in the letter.
Highlighting these irregularities, the Bangladesh Bank on 16 August 2021, directed Agrani Bank to take action within 10 working days.
Getting no reply, the central bank on 20 April this year sent another letter to the state-owned bank asking it to explain within seven days why action would not be taken against it.
Although two months have passed, Agrani Bank has not yet responded to the letter, prompting the central bank to take the punitive measure.
In its latest letter on 23 June, the Bangladesh Bank directed Agrani Bank to deposit the fine in the central bank's Motijheel office within the next 14 days.
If the bank fails to comply with the instruction, the amount will be deducted from Agrani Bank's current account with the central bank, the letter added.
