The central bank has removed AKM Shaheed Reza from the post of director of Mercantile Bank board due to his alleged involvement in loan irregularities, officials said.
In a further punitive measure, Mr Reza is also barred from being involved in any operational activities of any bank in the next two years from now on, the central bank officials added.
"We've removed Shaheed Reza from the post of the Mercantile Bank's board of directors along with the imposition of a bar on his involvement in any bank for a period of two years," Serajul Islam, spokesperson for the Bangladesh Bank (BB), told the FE on Wednesday.
BB Governor Fazle Kabir has issued an order in this connection on the director of the third generation private commercial bank as per recommendations made by its standing committee.
Mr Islam, also an executive director of the BB, said that the central bank has already sent the orders to the authorities concerned of the bank for taking action.
The Bangladesh Financial Intelligence Unit (BFIU) along with the Financial Integrity and Customer Services Department of the central bank had investigated the issue and found allegations that Mr Reza was involved in the irregularities to manage loans violating the existing rules and regulations, according to the BB officials.
They also said both the BFIU and the central bank probe teams found that Mr Reza had got a portion of loans, which were actually disbursed to PK Halder of the International Leasing and Financial Services (ILFS).
"I have no link with PK Halder. Actually, I do not know Halder," Mr Reza told the FE on Wednesday, while replying to a query.
He also said his loans with ILFS were regular and that he was paying his instalments regularly.
"I will appeal to the central bank board shortly against the decision," Mr Reza, also a former chairman of the bank, noted.
Earlier, on January 06 this year, the BB served a show-cause notice on Mr Reza, asking him to give explanation about his involvement in the irregularities.
Mr Reza submitted his explanation on February 3, but it failed to satisfy the central bank.
On April 4, Mr Reza also placed his written explanation to the standing committee of the central bank.
But, the committee did not find any logical ground of the explanation given by Reza, which is why it recommended removing him from the board of directors of the bank.
