Editorial
Sonali bank's board cannot avoid responsibility
Did it not happen under their watch?
We are dismayed to see that the parliamentary probe committee has apparently accepted the explanations of former Sonali bank directors that they were kept in the dark about the Tk.2,686 crore. Graft that has rocked the foundations of the banking system. Unfortunately, the Board of Directors cannot exonerate itself of any blame. The board is supposed to play a supervisory role. They receive copies of audit reports and most important of all, directors are supposed to vet the process by which large loans are disbursed. As it is, the management works under their watch from policy watch to operations. Hence, the board cannot absolve itself of any responsibility in this case. Whatever may be claimed, board members cannot pass the buck over to the management since they did not object to or raise any suspicion on the big chunks of cash that were taken in loans by Hall-Mark over a six month period since October 2011.
The culture of appointment of directors in state-owned-banks has for too long been based on political considerations. One really doesn't know whether there is any set criterion for their appointment. They are given jobs largely on political grounds perhaps with a 'wink' that they facilitate loans which may not necessarily meet banking requirements. Institutional integrity needs to be fully ensured since Sonali Bank is particularly viewed as the 'Treasury Bank' of the government.
The recruitment process must be brought above board. It is essential to appoint people who have adequate banking knowledge so that the bank's interests are safeguarded above all else. Removal of political influence from the board will help banks like Sonali to streamline operations by removing impediments to internal audit. It is worthwhile to note that state owned banks were transformed into public limited companies but their shares have not been floated to the general public. Had that been the case, bank's management and board would be held accountable for their actions, which at present they are not.
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