Central bank bars National Bank to disburse loans over Tk 10 cr

Bangladesh Bank, the central bank of the country ordered private-run National Bank not to disburse loans worth more than Tk 10 crore.

The decision was made because the private-run bank was facing uncertainty following the resignation of its Managing Director (MD), Md Mehmood Husain.

According to the sources in the central bank and National Bank the MD Mehmood submitted his resignation on January 18 as the board of the bank asked him to resign.

Such decision of creating a bar on disbursing loans has taken to protect the interest of the depositors, said Bangladesh Bank Spokesperson Md Mezbaul Haque.

The central bank sent a letter to the National Bank on Sunday, notifying the new order.

Bangladesh Bank would review whether the most recent resignation process of the bank MD was conducted in accordance with central bank guidelines, Haque stated.

A number of National Bank managing directors had previously experienced the same repercussions as a result of board members’ pressure.

Previously the central bank had ordered the bank to completely stop disbursing loans amid scams in May 2022 which was later lifted in December.