Bangladesh Bank (BB) has asked Uttara Finance and Investments Ltd, a non-bank financial institution (NBFI) where huge loan irregularities were detected to amend its misleading financial report for 2019 within the next month.
The order has been sent to Uttara Finance’s Managing director SM Shamsul Arefin by the central bank’s financial institution and markets department on February 9.
The central bank earlier on last December 1 sought explanation against huge financial irregularities in its book keeping. Uttara Finance’s response sent on January 5 this year lengthy but also empty. The BB officials were not satisfied.
“It was not at all accurate and was, in fact, insufficient,” said a senior official of BB seeking anonymity. Subsequently, the BB instructed the NBFI to amend its financial report for 2019.
Meanwhile, the central bank is yet to initiate any legal action against the organization and persons involved in the irregularities in the 25-year-old NBFI. Automobile distribution giant Uttara Motors has a substantial stake. Depositors are also in panic if they would get their fund back.
Arefin, who has been slapped with a Tk 5 lakh fine by BB for his complicity in hiding information to the credit information bureau (CIB) report, acknowledged receiving the instructions of the central bank. “We are now working day and night to amend the financial statement,” he told The Daily Observer on Monday.
Uttara Finance is adjusting its balance sheet through loan recovery from clients; Arefin said adding that the irregularities were flying under the radar and came to light after the central bank last year inspected the NBFI’s balance sheet until 2019.
The inspection team detected irregularities which include loans to company directors without application to paying huge cash to company chairman for no concrete reason. Officials used fake loans and business documents to make fictitious loans to directors. The company Managing Director withdrew Tk 335 crore without any approval from central bank.