The central bank Thursday fined NRB Bank Limited Tk 4.95 million for allegedly overreaching ceiling of investment in an individual share.
The fourth-generation private commercial bank (PCB) has been asked to pay the penalty within next three working days, officials said.
A note of warning attached: missing the deadline would result in the amount being debited from the bank's current account maintained with the Bangladesh Bank (BB).
The central bank has detected that the PCB engaged in price- manipulative activities of an insurance company's shares through continuously buying and selling the securities.
"NRB Bank violated section 26 Ka of the existing Bank Company Act by crossing the investment limit in an individual company's share," a BB senior official told the FE, without elaborating.
When contacted, Mamoon Mahmood Shah, managing director (MD) and chief executive officer (CEO) of the NRB Bank, said: "I have been informed about the BB letter on Thursday evening."
He also said the audit department of NRB Bank is still working on the matter.
"We've already terminated our CFO (chief financial officer) in this connection," the CEO said while replying a query.
He also said the NBR Bank had already informed the central bank of the matter.
Earlier on September 05, the central bank fined another fourth- generation PCB -- NRB Commercial Bank Limited -- Tk 2.35 million for its aggressive investment in the capital market in breach of rules.
The central bank is now probing entire money-market transactions along with exposures on the capital market to gauge liquidity movements in the banking system, following some already-detected incongruities.
Six teams of the BB engaged investigation different transactions of treasury and investment departments of the nine banks and three non-banking financial institutions (NBFIs).
"We've already strengthened our both offsite and onside monitoring and supervisions aiming to manage money market efficiently," another BB official explained.
The latest BB moves came against the backdrop of issuance of a forewarning as part of a precautionary measure to avert possible 'asset bubble' with a note for the banks to check diversion of funds into unproductive sectors.
Also, the commercial banks have been directed to ensure right end-use of the funds through conducting necessary inspections by their internal audit departments.
The central bank had already found a portion of funds under the stimulus packages being diverted and used for unproductive purposes instead of proper utilization in the selected respective sectors.
In some cases, borrowers have adjusted his/her other credits with loans under the low-cost funds, the BB said in its two-page letter conveyed to the banks on July 25.