Oddity from start
Abul Kashem, chairman of the proposed Peoples Bank, is set to fork out Tk 40 crore to buy shares in the bank, although his total net worth is Tk 44.51 crore.
He has net assets worth Tk 43.94 crore in the US, where he resides, and Tk 56.92 lakh in Bangladesh, according to the documents provided by him to the central bank as part of the process to purchase the stake.
This means, he would have to sell off about 90 percent of his assets to purchase shares in Peoples Bank -- a move that many would consider to be baffling.
Other than this oddity, the Bangladesh Bank found discrepancy in his net asset certificate by a New York-based accountancy firm by the name of Rafiq & Associates, CPA, LLC.
In the hard copy furnished to the BB by Kashem in February the firm's name differed in the letterhead and the stamp.
The central bank contacted Kashem about the discrepancy and a fresh copy was provided.
But, that copy did not carry the firm's letterhead and the certifier, Md Rafiqul Islam CPA, did not use his stamp -- which is mandatory if the document does not contain a letterhead.
Kashem also did not provide any document to support his claim of net worth -- such as his income tax returns filed with the US Internal Revenue Service -- other than the letter from the accountancy firm.
In September, Kashem informed the central bank that it was not compulsory in the US to state the net worth of the assets when filing income tax returns.
This prompted the BB in October to request the foreign ministry to get details of Kashem's net assets in the US and also to enquire whether there remains any impediment to bringing the amount from the US.
As of November 19, the BB did not hear back from the ministry.
In this backdrop, the central bank board of directors will convene on Sunday to make a final call on giving permission to three new banks. Bengal Commercial Bank and Citizens Bank are expected to get the preliminary approval (letter of intent) to start the process of opening new bank company, said a senior official of the BB requesting anonymity due to sensitive nature of the matter.
“But Peoples Bank may not get the letter unless all the requisite documents are furnished.” But, different quarters, including the government high-ups, are pressing the central bank to give initial approval to the proposed lender from the next board meeting despite placing irrelevant statement at the central bank by Kashem, the BB official added.
The government would like to complete all the required procedures for opening the new banks within its current tenure, according to a finance ministry document. The Awami League-led government's current tenure is supposed to end next month.
The government's move to give licences to the proposed lenders come at a time when the majority of the banks are facing several problems, including financial crimes, lack of corporate governance and shrinking deposit base.
The fourth generation banks, which were given licences under political consideration in 2013, failed to perform properly, and two of those are in a bad state.
Contacted, Kashem told The Daily star that that he had not submitted any inappropriate information to the central bank. He, however, declined to elaborate on the matter.
