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The Bangladesh Bank (BB) will start investigation into alleged irregularities in sanctioning loans from its Equity Entrepreneurship Fund (EEF).
The central bank has kept the EEF operation suspended in the past five months.
The Bangladesh Bank (BB) is expected to start probing such irregularities this week, official sources said.
The Department of Banking Inspection (DBI) has already been assigned to investigate the matter and will submit a report to the department concerned for taking necessary actions.
"We have already finalised the terms of reference (ToR) of the committee," a BB senior official told the FE, adding that the investigation will start soon.
Earlier, the authorities of the central bank decided that it would get the investigation done by the DBI instead of the EEF Unit to find out a clearer picture of loan sanctioning process.
The fund, managed by the central bank, has been created by the government to promote the country's industrialisation.
Sources, however, said a section of officials of the unit in collaboration with influential quarters sanctioned such loan without proper scrutiny. The EEF Unit sanctioned Tk 8.80 billion as of June 08, 2005 against 300 projects and disbursed Tk 2.78 billion, which was provided by the government through different budgetary allocations.
In the 2005-06 fiscal, the government allocated Tk 1.50 billion for the EEF, but the ministry of finance has not yet released the fund to the central bank.
The department concerned of the BB has already sent a letter to the finance ministry for releasing at least Tk 1.0 billion out of Tk 1.50 billion from the allocated the fund.
The central bank will release the fund to the entrepreneurs when they will invest their equity potion as per requirements.
Under the existing provisions, the central bank will provide entrepreneurs 49 per cent fund of the total cost of the project.
The fund was launched in 1999 by the BB with an initial allocation of Tk 1.0 billion for the promotion of agro-based industry and information communication technology (ICT) sectors. The fund was later raised to Tk 3.0 billion by the government.
The central bank earlier relaxed some conditions relating to the sanctioning of the fund in line with trade body recommendations to help entrepreneurs establish their industrial units.
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