Assignment on Accounting Fraud

Accounting Fraud: The Hallmark – Sonali
Bank Scam 2012
By Nazmul Huda Majumdar27 Fajle Rabbi37, Papia Sultana Abrity47, Rehnuma Tabassum
Jhunu93 and Farjana Mukta107

1.0. Introduction
Financial system is most important part of any economy. This financial system comprises banks
and non-bank financial institutions (NBFIs). Both banks and financial institutions are engaged in
mobilizing fund from surplus unit to deficit unit of the economy. Financial institutions are
engaged in financial intermediation, exchanging financial assets on own behalf and on
customers behalf, assisting in creation of financial assets providing investment advice and
managing portfolio of the participants.
The financial sector of Bangladesh is generally small and undeveloped. This sector consists of a
banking segment and an emerging but still promising capital market segment. The banking
segment in the country is relatively more developed than the equity market segment, even
though both are quite underdeveloped in international comparison. The root causes of
Bangladeshi financial sector problems are the lack of market discipline due to lack of
competition in the banking industry. Excessive government intervention and political
connection economic and political corruptions, operational and managerial inefficiency and
ineffectiveness result in vicious circle that inhibits economic development, industrialization and
social progresses in poor and developing countries in general and in Bangladesh in particular.
The financial sector is a vital part of an economy because of the role it plays in intermediating
savings of the private and public sector to productive activities including investment Bangladesh
financial system is dominated by the banking sector, which fundamentally depends on short-
term and medium-term deposits for financing their lending portfolios. This limits availability of
funds that would be required for long-term investments like infrastructure and housing.
Bangladesh has a capital market, with its known difficulties, and there is no vibrant secondary
market for bonds, which limits the availability of resources for infrastructure financing.

2.0 Overview of the Company (Sonali Bank Limited)
2.1 Mission
 Extending a whole range of quality products.
 supporting divergent needs of people aiming at enriching their lives.
 Creating value for the stakeholders.
 contributing towards socio-economic development of the country.
2.2 Vision
 Socially committed leading banking institution with global presence.
2.3 Financial History of Sonali Bank
Sonali Bank was established in 1972 under the Bangladesh Banks (Nationalisation) Order,
through the amalgamation and nationalisation of the branches of National Bank of Pakistan
Bank of Bahawalpur and Premier Bank branches located in East Pakistan until the 1971
Bangladesh Liberation War. When it was established. Sonali Bank had a paid up capital of 30
million taka. In 2001, its authorised and paid up capital were Tk 10 billion and Tk 3.272 billion
respectively, Presently, its authorised and paid up capital is Tk 10 billion and 10 billion
respectively The bank's reserve funds were Tk 60 million in 1979 and Tk 2.050 billion on 30
June 2000. In 2013, $250,000 was stolen from the hank hy Cyber criminals using the Swift
International payments network. In 2016 the Bank signed an Memorandum of Understanding
with PayPal.
2.4 Objectives of Sonali Bank
Sonali Bank believes that it will become a leading bank in the government sector. They
believe that their aims and objectives can only be realized fully and sustained overtime by
faithfulness to ethics that cannot always be built into sets of rules and regulations. In this
belief in ethics that motivates the bank in its dealings with customer, regulators employees.
major objectives of this bank are commitment to clients of the bank, personal banking, rural