Dhaka: Globally renowned accounting firms Ernst and Young and KPMG have been tasked with assessing the asset quality of six banks as part of efforts to restore transparency and accountability in the banking sector. Bangladesh Bank (BB) has appointed the firms to carry out the jobs, BB sources said.
According to Bangladesh Sangbad Sangstha, the six banks targeted for the audits are First Security Islami Bank, Exim Bank, Global Islami Bank, Social Islami Bank, ICB Islamic Bank, and Union Bank. Ernst and Young will focus on Global Islami Bank, Social Islami Bank, and ICB Islamic Bank, while KPMG will handle First Security Islami Bank, Exim Bank, and Union Bank, according to the central bank sources.
BB Spokesperson Hosne Ara Shikha stated that the audit's findings will determine whether the managing directors (MDs) of these banks can resume their positions. If the audit proves the MDs were not involved in financial irregularities, they may return to their roles. Otherwise, they will be permanently barred, she added.
Earlier, MDs of six private banks were sent on mandatory leave as per the decision of their boards of directors to ensure transparency during the audit. Shikha explained that the move came as the taskforce, formed by the central bank for reforms in the banking sector, decided to conduct forensic audits on these banks due to massive loan scandals and irregularities leading to liquidity crises.
Since the MDs were in office when the loan irregularities occurred under the previous management, they have been sent on leave to avoid conflict of interest and controversy, ensuring transparency during the audit. Among the six banks, four are associated with the S Alam Group, a business conglomerate linked to former Prime Minister Sheikh Hasina.
Following the political transition in August, the central bank restructured the boards of directors for these banks. The Asian Development Bank (ADB), actively supporting the reform efforts, recently sent representatives to Bangladesh. They recommended a comprehensive review of the banks' asset quality, prompting this high-level audit.
The central bank has already requested detailed information from the six banks. Their chairmen have been instructed to provide full cooperation to the auditing teams. Meetings involving central bank Governor Ahsan H. Mansur, top officials, and ADB representatives have emphasized the importance of transparency during the process.