A central bank inspection team has detected 'window dressing' in the balance sheet of Bangladesh Krishi Bank (BKB) to show its higher earnings and conceal provision shortfall to lower its net loss, officials said.
The team had inspected 42 branches and head office of the bank to check the balance sheet until June 30 last and found the mismatch, they added.
However, the bank authority has denied deliberately hiding the information and rather said junior officials might have done mistake which caused the difference in reckonings.
According to a quick summary report the BKB management showed Tk 5.86 billion as loss incurred by the bank until June 2017.
Until then (June 2017), the bank's total loans and advances amounted to Tk 183.11 billion against which the requisite provision was Tk 24.35 billion. The bank kept Tk 25.26 billion which is higher by Tk 903 million than the required provision.
The team inspected 43 branches so far, but found that the bank kept Tk 290 million less than required provision against the loans and advances handed out from those branches.
The central bank team also found that against 'other asset' category the bank kept Tk 18.02 billion. During the inspection, the team declared some of the accounts, which remained unadjusted for over one year, worth Tk 10.33 billion as classified in 'bad' category.
The bank needs to keep Tk 10.33 billion as provision against this classified 'other assets' for which it kept only Tk 5.70 billion. The bank now needs to keep Tk 4.63 billion more against the provision shortfall.
The state-run BKB showed Tk 11.44 billion as income of the 43 branches the team inspected. But the team found the real income of the braches as Tk 11.42 billion.
In this case Tk 16 million is shown in excess as income of the branches.
"If the financial records of other branches were scrutinised, the amount of total income of the bank may further decline," says the inspection report.
The inspection team said the total adjusted loss of the bank for the year that ended in June 2017 will stand at Tk 9.81 billion against which the bank showed Tk 5.86 billion.
Contacted over telephone, BKB managing director Mohammed Ismail Hossain said as a regulator the central bank sees things in its own way while the bank officials do it differently.
"The amount the inspection team made classified was not classified in our judgment. Thus we did not keep the required provision against that amount," he said, adding that it may be a mere fault of junior officials.
"We will adjust the account according to the central bank directive," he said.
Mr Hossain said the specialised bank for financing agriculture sector has a significant contribution to the uplift of rural people's life, especially of farmers. "The prime objective of the bank is not profit making."