The final approval process of the proposed People’s Bank has been stalled due to the failure in producing necessary papers and depositing required paid-up capital by the applicants, and alleged submission of false documents, it is learned from reliable sources.
They said that finding no other alternative, the chairman of the proposed bank, Abul Kashem, a Bangladeshi American, is trying to use the reputation, influence and the financial support of some renowned figures in the country.
The banking company has already been accused of various irregularities in its process of submitting necessary papers as well as in the process of depositing the paid-up capital.
Bangladesh Financial Intelligence Unit (BFIU) of the central bank in its investigation found that Abul Kashem has shown the amount of money as paid-up capital of the proposed bank which he took as loan from other banks.
The sources said Abul Kashem has failed to produce academic certificates in support of the documents he submitted to Bangladesh Bank. He mentioned that he passed SSC exam in 1973, HSC in 1975 and obtained Bachelor of Arts (BA) degree in 1978, but did not submit any of his academic certificates to Bangladesh Bank along with his documents.
He has also deposited the capital given by the investor shareholders to his own bank account.
In such a situation, several directors have withdrawn themselves from the initiative to establish the bank while two directors have been removed on the instructions of the central bank for alleged irregularities.
The sources said that even after two years of receiving the initial consent or letter of intent (LOI), the bank authorities have not been able to submit required papers and capital so far. The sponsors received time extension thrice on various pretexts.
They express fear that the letter of intent (LOI) may be cancelled due to the inability of the sponsors to deposit paid-up capital.
Bangladesh Bank in a letter on September 8, 2021 said, “For special reasons, the time has been extended until December 31, 2021 for the last time. The LOI will be considered cancelled if the applicant fails to apply for the licence by fulfilling the applicable conditions within the extended period.”
Bangladesh Bank's spokesman Sirajul Islam said they are yet to give the final approval to the bank because the applicants have been failing repeatedly to submit the necessary papers.
According to the relevant documents, the policy approval of three new banks named Bengal Commercial, Citizen and People's was given at the meeting of the Board of Directors of Bangladesh Bank on 17 February 2019. Although two of these banks started commercial operation, People's Bank’s fate is hanging in the balance.
In the bank's application, Abul Kashem identified himself as a resident of 236 East Second Street, Brooklyn, New York, and a businessman. He mentioned the name his business as Kingston Contracting Inc. He also claimed to have a real estate business there.
According to his statement, he did business there for 15 years and as of April 27, 2018, his wealth reached 5.122 million dollars.
Relevant sources have stated that he does not have assets worth such a huge amount in America. The documents of his statement of assets were made with false information and submitted to the central bank.
At present, a capital of Tk 400 crore is required to set up a new bank. After receiving the initial consent letter, Abul Kashem started move to raise this capital.
The sources said former Vice Chairman of Meghna Bank Abdul Alim, Managing Director of Khan Brothers Group Tofail Kabir Khan, Director of Tama Construction Mukitur Rahman, owner of Car Selection Aslam Serniabat and many other businessmen, including Zakir Hossain Patwari, have fallen victim to fraud of Abul Kashem.
However, coming to know Abul Kashem's real financial condition, some of them moved away at one stage. Besides, Shahidul Ahsan, a top official of a private bank, had invested Tk 10 crore in People's Bank with a loan from First Security Bank.