Fraudulent methods include creating loans to savings and time deposit accounts without the consent of the customer, transferring funds between accounts, and
Highlights:
- Internal investigation reveals TK8 crore robbery
- Managers have used illegal methods for several years
- The scam was uncovered in January
- Some fraudulent customers may be implicated
- Authorities will suspend managers and issue notifications regarding the problem
- Affected customers are trying to recover deposits for several months
- The bank stated that funds will not be refunded until the investigation is completed
An internal investigation uncovered significant financial fraud at Union Bank’s Hat Hora branch. Manager Zakir Hossain has been accused of systematically siphoning off TK8 crore from customer accounts over the years.
The fraudulent activities involved creating unauthorized loans for savings and time deposit accounts, moving funds between accounts, and improperly handling loan transfers.
This fraud came to light in January when customers attempted to withdraw their deposits, inadvertently revealing the manager’s misconduct. A subsequent investigation confirmed extensive fraud involving numerous customers.
As a result, banking authorities have taken action against the manager. The bank provided him with a notice to explain why legal action shouldn’t be initiated against him for financial misconduct.
Affected customers are seeking reimbursement
Despite clear evidence, the bank has yet to refund affected clients. At least 20 customers have repeatedly visited bank branches and headquarters in hopes of recovering their deposits.
Banking authorities have assured that funds will be reclaimed from Zakir and returned to the clients, despite not having defined a specific repayment process.
Results of the investigation
According to the investigation report, Zakir served as manager at the Hat Hora branch from January 25, 2016, to December 8, 2020, and again from February 7, 2021, to January 30, 2025. The findings indicate that he engaged in illegal practices throughout both terms.
The investigation revealed that Zakir created fake investments and loans to misappropriate funds, while also replicating Mudharabah Period Deposit Receipts (MTDR) and using them to withdraw money.
He manipulated transactions in client accounts to enable unauthorized loans and transfers, ultimately siphoning off TK8,068,800 from various customer accounts at the branch.
Union Bank’s Managing Director, Humayun Kabir, mentioned during a phone conversation that “the branch manager and fraudulent clients are working together in these schemes to evade responsibility.”
He added, “An investigation is ongoing. A decision will be made once the investigation concludes. Zakir has been suspended temporarily and is under pressure to return the funds.”
In response to the allegations, Zakir declined to comment, stating that the audit department was handling the matter.
Customer Experiences
One affected client, Mizanur Rahman, had deposited TK60 lakh at the Hatkhola branch based on an MTDR. He reported initially receiving a loan for the first MTDR, which he settled. However, he discovered that a second loan had been taken out against his second MTDR without his knowledge.
Mizanur expressed frustration at the inability to retrieve his funds after repeated attempts to contact the bank. He mentioned that due to insufficient capital, his shoe manufacturing factory struggles to meet orders on time.
Union Bank, among several institutions, is facing significant capital issues following last year’s political changes. They have had difficulties fulfilling large customer deposit withdrawals.
Recently, Bangladesh Bank Governor Ahsan H Mansur announced plans for the integration of five Islamic banks, including Union Bank, into a single entity.
