The BB yesterday submitted a report on problem banks including Oriental, which was taken over by the central bank in June due to its poor financial condition, to a meeting of the parliamentary standing committee on finance ministry.

The BB report told the standing committee meeting that an investigation team of the central bank has been inquiring the irregularities in Oriental Bank to identify the people involved in the crimes. Besides, an external auditor Ahmed and Ahmed Chartered Accountants will work for the same purpose, a source present at the meeting said quoting from the report.

Standing Committee Chairman Mushfiqur Rahman presided over the meeting at Jatiya Sangsad Bhaban and supported the central bank's steps. The committee suggested the central bank to gear up monitoring activities over the banking sector for the interest of depositors.

"Legal actions against the persons involved in irregularities in Oriental Bank will be taken after getting reports from both the central bank investigation team and the external auditor," the report said.

The report also informed the committee that the central bank is considering formulation of short-term and long-term plans to save Oriental.

The report said Oriental Bank failed to comply with conditions set by the central bank for carrying out banking activities. Oriental also failed to return deposits to its clients.

The BB took over Oriental to save common depositors and after several steps since the take over the bank is improving with confidence of the clients, the report said.

The central bank also described the situations of three other problem banks to the standing committee members. The three banks are First Security Bank, Bangladesh Commerce Bank, and Social Investment Bank. These problem banks were asked to improve their financial and management situations by the end of this year.

The report said First Security Bank was labelled as a problem bank in 2004 due to poor financial condition and mismanagement, and its capital deficit was Tk 31 crore till March this year. The report, however, observed that there are signs of improvement in the bank's management and financial situation after change of ownership.

In 2004, the BB also listed Bangladesh Commerce Bank as a problem bank due to weak resource management. The bank's capital deficit was Tk 50 crore till March this year. Bangladesh Commerce Bank's improvement is very slow in different sectors, the report said.

According to the report, Social Investment Bank was listed as a problem bank in 2005, and its capital deficit was Tk 66 crore till March this year. The bank has been suffering from a huge load of classified loans that affected its net income.

The BB report told the meeting that the central bank has been monitoring activities of nine other banks under the Early Warning System (EWS) which was initiated in 2004. The banks are Pubali Bank, United Commercial Bank, City Bank, AB Bank, IFIC Bank, National Bank, Shahjalal Bank, Al Arafah Bank and Premier Bank.

Pubali Bank, United Commercial Bank and City Bank have been cleared from the list of problem banks but in accordance with the rules these banks will be under the central bank's EWS monitoring for a year.

Meanwhile, opposition lawmaker Sayedul Haq of Awami League yesterday walked out of the standing committee meeting protesting 'interference by ruling alliance lawmakers which prevented him from raising the issue of government borrowing'.

"BNP and Jamaat members prevented me from raising the issue of government's immense borrowing from the banking sector that has been affecting overall financial management," the AL lawmaker told journalists after the walk out. He also protested absences of both the finance minister and the state minister at the meeting.