NRB Commercial (NRBC) Bank has often made headlines for alleged money laundering, loan irregularities, over-expenditure and recruitment anomalies. In 2017, Bangladesh Bank had to intervene to dissolve the bank’s board and remove its managing director Dewan Mujibur Rahman over a loan scandal involving Tk 700 crore. The then chairman Farasath Ali had to resign from the board. Both Mujibur and Farasath were banned from bank directorship for two years by the BB, and the board was subsequently restructured. The new board is headed by a chairman against whom allegations of irregularities were already rife, and the bank continues to be dogged by anomalies. A six-month investigation by The Daily Star based on hundreds of pages of documents reveals numerous irregularities and even gun toting inside the bank.
Today we run third and fourth installments of this four-part series. Part three is a story of shady and super abnormal increments of 27 bank officials in violation of the bank’s own HR policy. The fourth and last part looks into the enviable appetites of the bank’s top executives. Judging from their food bills, it is difficult to imagine how one can consume so much food during office meetings.
Only a select 27 employees of NRBC Bank were given salary hikes, and that too astonishingly, in 2022 in violation of banking rules as well as NRBC’s own human resources policy, a Bangladesh Bank investigation has found.
Of them, three senior officials were given up to 13 increments in one go, shows an NRBC office order dated February 13, 2022.
Two deputy managing directors got increases of Tk 1.25 lakh to Tk 1.3 lakh or about 60 percent of their basic pay. At least 10 others were given salary bumps between 50 and 75 percent, while the rest received 18 to 40 percent pay hikes.
The NRBC office order justified the hefty increments, saying that these 27 had made “exceptional contributions towards the achievement of the bank’s goal.”
But a report by Bangladesh Bank’s Financial Integrity and Customer Services Department (FICSD) said such increments are a violation of banking law as well as NRBC’s own human resources policy manual.
According to a Banking Regulation and Policy Department circular, increments must be given universally across the organisation, and not for a chosen few.
“Bangladesh Bank and Anti-Corruption Commission have also collected his bank statements. If there is any illegal transaction or money laundering through his secured overdraft account or his credit cards then this will come up in the investigation.”
— Tamal Parvez
The increments were later cancelled, but the BB pointed out that “no action was taken against the managing director of the bank even though he had clearly abused his powers to execute this irregularity.”
This newspaper has documents showing how at least two of these “exceptional contributors” were involved in striking irregularities.
One was involved in moving around huge amounts of money using his credit cards and the overdraft (OD) account with NRBC.
The official is Md Jafar Iqbal Howlader, vice-president and head of the financial administration department at the bank. In February 2022, he got a 39 percent raise, taking his salary from Tk 104,000 to Tk 144,600. However, the decision was subsequently revoked.
‘CONTRIBUTIONS’
The BB investigation found that NRBC had not just given him undue increments but also undue promotions.
The man had joined the bank as a principal officer in 2013. Within a year, he was promoted to a first assistant vice-president, breaking the bank’s own HR policy which says that two years of experience is mandatory for that promotion. Similarly, within a year of becoming first vice-president, he was promoted to vice-president, again breaking the HR guidelines.
An analysis of his overdraft bank account statements shows a strange pattern – a huge sum of money is transferred into his OD account, and then a similar amount is transferred out or paid as credit card bills. Sometimes it happens by the next day, and sometimes within a few days. In many instances, the money was transferred back into the same account.
An overdraft account allows a customer to pay for expenses, bills etc. by borrowing from the bank, when the balance of the account reaches zero. This account is renewed every year, subject to scrutiny, meaning the bank has the knowledge of all transactions, both natural and unnatural.
Jafar’s overdraft account was opened in December 2013, but these patterns gained momentum only after 2017, after the current chairman, Tamal Parvez, took over.
“I have made payments for other people because I wanted to popularise the use of our digital products. Many of them didn’t know how to use our banking app.”
— Jafar Iqbal
When he was a director in 2016, Tamal once entered the boardroom accompanied by a man with a firearm to “terrorise other board members and officials”. At the time, the board was investigating Tamal and several others over laundering of Tk 64 crore from the bank in the name of disguised loans, according to multiple meeting minutes.
Tamal defended bringing the gunman in the boardroom, saying the gunman was his bodyguard. He also denied any role in the alleged loan scandals.
The Daily Star analysed transactions of six credit cards, and five bank accounts linked to Jafar to establish a pattern that is reminiscent of layering.
Between 2015 and 2022, he transacted multiple crores of taka through his bank accounts and credit cards.
Transactions only over Tk 1 lakh each happening on the same day or subsequent days between 2017 and 2022 were considered for this story.
The pattern shows countless incidents where a certain amount of money was paid to Jafar’s account, and then immediately paid out by him.
DUBIOUS TRANSACTIONS
According to the bank’s own Money Laundering and Terrorist Financing Risk Management Policy, “Layering is the second stage of the money laundering process, in which illegal funds or assets are moved, dispersed and disguised to conceal their origin. Funds can be hidden in the financial system through a web of complicated transactions.”
The policy also says one indicator of a suspicious transaction is “frequent cash transactions not aligned with the business or profession of the customer.”
For Jafar, it was exactly that – transactions worth crores of taka were made through his accounts and credit cards when his stated monthly salary from the bank was tens of times below the amount.
Money came into his account primarily in two ways. One method was that the money was transferred directly into his account through wire transfer, or through cash and cheque deposits. The other method was crediting the money to one of his many credit cards.
The money went out through several methods: it was sent back to the account sending the transfer; wired to another account, either of NRBC or of an external bank; the money was charged on credit cards owned by Jafar; a cheque was issued in the name of a person; or the money was used to pay off loan installments.
Between 2018 and 2020, there were at least seven such instances where a credit card transferred him money, and he paid the money out through another credit card as a bill, or transferred out the money on the same day.
For example, on July 9, 2018, he transferred Tk 5 lakh from his credit card to his overdraft account, while he paid a bill of Tk 4.54 lakh with his card. He repeated this between May 11 and 14, 2020, getting Tk 14.9 lakh over three days and paying Tk 13.4 lakh through four credit cards on subsequent days.
There were four instances in 2017 and one in 2020, where different credit cards transferred money into his OD account, and he transferred the money to this bank account the same day or subsequently.
In addition, there were four instances in 2017-2018 where another NRBC account with the bank’s principal branch was transferring money into Jafar’s OD account and he transferred the money to the above-mentioned account the same day.
UNDER ACC, BB SCANNER
There were 14 same-day back and forth transactions of large amounts of money between Jafar and Md Zamir Uddin, the first vice-president of the bank’s treasury division.
On April 13, 2021, Jafar transferred Tk 5 lakh to Zamir from his OD account, and the same amount was transferred back to him by Zamir, two days later. On April 18, 2021, Zamir got five separate transfers of Tk 1 lakh each, and then he transferred Tk 5 lakh to Jafar’s OD account.
In total, Jafar gave Zamir Uddin at least Tk 97 lakh through at least 41 transactions, while Zamir gave Jafar at least Tk 70 lakh back usually on the same day, or within the next one or two days, between 2017 and 2022.
Jafar was also found paying loan installments for others across five loan accounts. He was also getting money from a loan account of NRBC bank that was not registered in his name — he got Tk 27 lakh via 12 transactions from 2020-2021.
Jafar said he has a secured overdraft account with NRBC bank, which allows him to withdraw and deposit money as he sees fit.
“I have made payments for other people because I wanted to popularise the use of our digital products. Many of them didn’t know how to use our banking app,” he told The Daily Star.
He also said that he has loans with other banks that require regular payments. “I have no other source of income except for my salary, and my monthly expenditure is about Tk 1 lakh,” he said.
Zamir said none of his transactions with Jafar was out of the ordinary.
“I used to take money from him to pay my credit card bills, which need to be paid on a certain date. Then I used to give that money back. I used to borrow from him because he is a close colleague of mine,” he said.
Bank Chairman Tamal Parvez said they are aware of these transactions and that they are investigating it.
“Bangladesh Bank and Anti-Corruption Commission have also collected his [Jafar’s] bank statements. If there is any illegal transaction or money laundering through his secured overdraft account or his credit cards then this will come up in the investigation,” he told this newspaper at his Motijheel office on March 6.
Eminent economist and director of Policy Research Institute of Bangladesh Ahsan H Mansur said banks have a responsibility to stop suspicious transactions.
“It is up to the bank to monitor such transactions, and the bank cannot evade responsibility,” he said.
PUNISHABLE OFFENCE
The other official who got hefty increments is Assistant Vice-President and head of Rooppur Branch Md Rashed Ul Alam. He had been given a 58 percent raise, or 12 increments at a go.
About four years before the raise, he sanctioned a Tk 5 crore loan using a plot of land as collateral that the customer, Papa Roma, had not even owned yet. After getting the loan, the customer spent the money to buy the very land and used it as collateral for the loan, according to the BB investigation.
Rashed denied any wrongdoing, and said, “In fact, the price of the land is worth way more than was estimated by the bank.”
Bangladesh Bank investigation found that NRBC approved the Tk 5 crore loan as working capital for Papa Roma on February 19, 2019.
The BB report said the terms of the loan included keeping 173.5 decimals of land as security. But the land was not owned by Papa Roma’s owner Saifur Rahman at that time.
The report also states that Papa Roma transferred Tk 2.5 crore and Tk 2 crore on February 27 and April 4, 2019, to the owner of the plots. Saifur received the land deeds on April 7, 2019.
The BB report says this is a violation of the law and a punishable offence, and called it loan forgery.