ShareBarta24.com, Dhaka: Bangladesh Bank has fined the private sector NRB around Tk 5 million for its alleged involvement in the manipulation of shares of insurance company Pioneer Insurance. A letter in this regard was sent to the MD of the bank on Thursday. This information has been known from the relevant sources.
The share price of Pioneer Insurance rose abnormally between June last year and June this year. In just one year, the company’s share price rose from Tk 29 to Tk 215 on June 14. In other words, the share price increased 6 and a half times in one year.
Sources said the central bank had found evidence that private banks were involved in the unusual increase. After that, when the investigation started, NRB Bank started selling the shares of the insurance company. The share price started falling. The stock was last traded at Tk 131.20 on the DSE today.
Sources further said that Bangladesh Bank got the information of this manipulation while supervising the investment activities of various commercial banks in the context of the abnormal rise of the stock market. NRB Bank has been fined on its basis. Further investigation is underway in this regard.
NRB Bank has been fined under Section 26 (a) of the Banking Companies Act. Subsection (1) of this section states the amount of shares a bank can hold in another bank or company. However, NRB Bank violated that and invested in shares of Pioneer Insurance.
NRB Bank has been fined around Tk 5 million under Section 27 (a) (3) for investing in Pioneer Insurance in violation of the rules. This section states that if a banking company violates the provisions of sub-section (1), the bank company shall be liable to a fine not exceeding Rs. 20 lakh. If the violation continues, an additional fine of not more than Rs 50,000 will be imposed for each day from the first day.
Source: Share Barta 24 by www.sharebarta24.com.
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