Corruption and loan irregularities by board members are pushing yet another financial institution towards the brink of insolvency. This time, it is First Finance, a non - bank financial institution.
Its financial health has deteriorated to the point that it is now unable to maintain the mandatory cash reserve with the central bank.
Any financial institution, banks or non - banks, must keep 19 percent of its depositors' money in the form of statutory liquidity ratio (SLR) and cash reserve ratio (CRR) with the Bangladesh Bank.
As of September, First Finance has a cash reserve deficit of Tk 221. 87 crore, which prompted the BB on December 3 to slap it with a fine of Tk 2. 21 crore.
An investigation carried out last year by the BB revealed that AQM Faruk Ahmed Chowdhury, former chairman of First Finance, embezzled more than Tk 4 crore through irregularities, including loan forgery.
According to the probe report, Faruk received remuneration despite not attending board meetings, misappropriated Tk 65 lakh from selling land that was mortgaged against default loan, and received money against false advertisement.