Bangladesh Bank has ordered the removal of Dhaka Bank PLC sponsor-director Khandaker Munir Uddin from the bank's board over allegations of concealing information and violating the Bank Company Act through misrepresentation.
The central bank also fined Munir Tk 100,000 and imposed a Tk 400,000 penalty on Dhaka Bank.
Bangladesh Bank's board of directors has rejected separate appeals filed by Munir and the bank seeking a waiver of the penalties and disciplinary action. However, Munir had not been removed from the bank's board as of Saturday, despite the central bank's directive, according to a letter sent by Bangladesh Bank to Dhaka Bank.
The letter said the bank was fined over allegations that misleading information had been provided to Bangladesh Bank through fraudulent means.
A central bank investigation found that Munir had served simultaneously as a director of Dhaka Bank and as a director and chairman of Shanta Life Insurance. Under the Bank Company Act, holding directorships in both a bank and an insurance company at the same time constitutes a violation of the law.
After Bangladesh Bank's inspection uncovered the irregularity, Munir resigned from his position at Shanta Life Insurance. However, he was fined Tk 100,000 for the violation, while Dhaka Bank was fined Tk 400,000. The central bank also directed that he be removed from the bank's board.
Sources said Munir and Dhaka Bank separately appealed against the penalties. Bangladesh Bank's board subsequently rejected their appeals, making the enforcement of the disciplinary action mandatory. Despite this, he had not been removed from the board as of Saturday.
Munir is a sponsor-director of Dhaka Bank and also serves as chairman of its Risk Management Committee.
He began his business career in 1985 after completing his BCom (Honours) and MCom degrees in accounting from the University of Dhaka. He is the founder and managing director of Shanta Holdings Limited and Shanta Group, and also serves as managing director of STS Group, which operates Evercare Hospital Dhaka and the International School Dhaka.
Repeated attempts to contact Dhaka Bank's current chairman Abdul Hai Sarker for comment were unsuccessful.
Bangladesh Bank spokesperson and Executive Director Arif Hossain Khan said the Bank Company Act clearly sets out the eligibility requirements for serving as a director of a bank, as well as the penalties for violating those provisions.
He said that once Bangladesh Bank's board rejects an appeal against a penalty, the disciplinary action must be enforced.
"There is no scope for making exceptions in such cases, regardless of how influential an individual or institution may be," he added.
