Governor assures support for smooth operation of Islamic Bank Board
Islamic Bank Bangladesh Limited is pursuing the recovery of approximately Tk 10 million that five Shariah-based banks owe and discussed this matter with Bangladesh Bank Governor Mostakur Rahman on Tuesday, March 31. The meeting took place at the central bank’s headquarters at 11:30 a.m. and included the governor, the bank’s chairman, directors, and senior officials.
During the talks, Bangladesh Islamic Bank Chairman M. Zubaydur Rahman urged for swift action on outstanding payments. Officials noted that the Islamic bank also has pending payments from state-owned Janata Bank. They also highlighted pending remittance incentives amounting to around Tk 100 billion and asked for the release of these funds from Bangladesh Bank.
Alongside this, lenders requested regulatory assistance for recovering large loans, proposed reduced provisioning requirements under certain conditions, and sought guidance on managing relationships with key industry stakeholders.
In response, Governor Moshtaqul assured the board that their concerns would be taken seriously, promising to communicate any support decisions promptly while confirming his commitment to ensure smooth operations.
A senior Bangladesh Bank official mentioned that the governor inquired about the bank’s operational challenges and directed relevant departments to address these issues. This discussion takes place as Islamic banks work toward recovery from an ongoing governance crisis.
On February 17, Bangladesh Bank removed board member Md Abdul Jalil, appointing accountant SM Abdul Hamid in his place. Previously, from 2017 until the Awami League government’s fall in August 2024, control of the bank had effectively rested with the S Alam Group. During that period, around Tk 1.2 billion was withdrawn under various pretenses, and about 10,000 officials were appointed irregularly, leading to a serious crisis for the bank.
After an interim government took office in 2024, the bank’s board was restructured, resulting in several senior officials leaving the country, with Md Abdul Jalil eventually being appointed to the new board.
This meeting was the second round of discussions between Governor Moshtaqul and the board. At the first session, he remarked on the decline in governance at Islamic banks, which were once considered robust institutions. He reiterated the central bank’s commitment to restoring stability, emphasizing that it should not serve the interests of any single group or political faction.
Meanwhile, a report to the Anti-Corruption Commission indicates that the S Alam Group secured loans nearing Tk 1.9 billion from four of its eight banks, with Islamic banks responsible for about Tk 1.05 billion of that total. Investigations by the Bangladesh Financial Intelligence Bureau revealed that over Tk 93,000 crore had been laundered through dubious companies. Findings suggest that S. Alam Group’s head, Saiful Alam Masood, along with related entities, leveraged their influence to obtain loans, either directly or through intermediaries.
