Premier Bank Scandal Unfolds in Bangladesh
While much of the discourse regarding Bangladesh’s banking struggles centers on fictitious loans, a more sophisticated and seemingly legitimate operation tied to Premier Bank has surfaced. This scheme, allegedly orchestrated by HBM Iqbal, the long-time founding chairman of the bank, has reportedly affected millions.
A recent investigation by Bangladesh Bank uncovered that banks are being treated like private properties by the Iqbal family, functioning as personal ATMs for other enterprises. The inquiry revealed a variety of dubious transactions, with non-performing loans (NPLs) climbing. Unlike others who provided loans to fake entities, Iqbal employed a subtler method. He secured a loan for the Iqbal Centre in Banani from the same bank he led.
Former Awami League MP HBM Iqbal chaired Premier Bank from its inception in 1999 until his resignation on January 12, 2025, which coincided with the Sheikh Hasina government’s downfall.
During his leadership, troubling patterns emerged, particularly concerning high payments made to family-run businesses. This has raised significant concerns about the bank’s governance and accountability.
Rental Overcharging at Iqbal Centre
The Iqbal Centre in Banani, owned by HBM Iqbal, is at the center of the controversy. Banks reportedly paid rent that was three to four times above the normal rates in the market. Reports indicate that since a new rental agreement was signed in 2021, Premier Bank has overpaid at least TK60 crores annually.
For context, while premium office spaces like SMC Tower charged around TK130 per square foot, Premier Bank’s rent was between TK440 and TK462 per square foot. Calculations show an over expenditure of TK61.53 crores per year, with the actual rent being closer to TK100 per square foot.
To add insult to injury, by August 2024, the bank had already paid TK27 crores for over 42 months, despite inspections revealing bare roofs without proper walls, electricity, or sanitation. Nevertheless, the bank continued to make these payments, allegedly sanctioned by the Bank of Bangladesh.
Furthermore, Premier Bank’s total outlay for rent to entities associated with Iqbal has soared to nearly TK220 crores, essentially funneling bank resources into private ventures. This amount considerably exceeds the adjusted amount proper of TK159.32 crores as of December 2023, indicating possible contractual violations or prior unadjusted payments.
Unaccounted Subsidiary Funds
These questionable practices extend beyond the main branch. Each year, Premier Bank reportedly wastes around TK3.75 crores on a “Central Warehouse” that occupies a mere 25,000-square-foot tin roof in Tejgaon, rented from Vice Chairman Moyne Iqbal, HBM Iqbal’s son. Despite owning land in Banani where they could have constructed their own storage, only a quarter of the warehouse is utilized.
Moreover, Premier Bank Securities Ltd (PBSL), a subsidiary, rents 10,400 square feet from a property owned by HBM Iqbal’s wife. Inspections revealed that PBSL only makes use of a small fraction of this space (510 square feet), with the rest utilized as private offices and meeting rooms. Adding to this, Premier Bank has lent PBSL TK230.20 crores, with TK106.58 crores marked as personal in the bank’s records, reportedly at a minimal interest rate of 5%.
Even the Premier Bank Foundation, which is meant for charitable contributions, has come under fire for misuse. Contrary to regulations capping donations at 1% of annual profits or TK1 crore, the foundation donated TK30 crores in 2023 and another TK5 crores in 2024 without board approval. These funds reportedly benefited Iqbal family-run institutions, leading to losses for both depositors and shareholders.
Regulatory Responses and Future Prospects
A Bangladeshi banking official noted that the bank is seeking the central bank’s approval to rent out properties owned by directors or shareholders. “HBM Iqbal had considerable influence during the previous government, which led to many questionable approvals,” the official explained. Irregularities have surfaced during special inspections, and legal actions are expected to follow.
As of March 2025, Premier Bank’s bad debts soared to TK9,817 crores, accounting for 29% of its total loans—a steep rise from December 2024’s TK1,611 crores (4.9%). The bank is also falling short on provisions, with a reported deficit of TK7,016 crores.
HBM Iqbal and his son Moin Iqbal stepped down from their positions on January 12, 2025. Imran Iqbal, another son, has since taken over as chairman. The Anti-Corruption Commission (ACC) is currently investigating HBM Iqbal for possible embezzlement and illicit asset accumulation, imposing a travel ban on him and his wife in October. Nevertheless, sources indicate they are currently overseas. Furthermore, the accounts belonging to HBM Iqbal and his family members were frozen in November.
Efforts to obtain comments from Premier Bank’s Managing Director and current chairman have been unsuccessful. A visit to the bank’s headquarters on July 23 yielded no response, even after a lengthy wait.
