The Bangladesh Bank has appointed observers to Islami Bank Bangladesh Limited and First Security Islami Bank Limited in the wake of the private banks’ reported irregularities in loan disbursement.
Central bank spokesperson Mezbaul Haque confirmed the news to The Business Standard Monday (12 December).
The Bangladesh Bank’s Forex Reserve & Treasury Management Department Director Abul Kalam will serve as the observer to Islami Bank and Payment Systems Department Director Motasim Billah will serve the post at First Security Islami Bank.
The decision comes following media reports that the two Islami banks disbursed a large amount of loans in violation of banking rules in recent times.
According to media reports, Chattogram-based business entity S Alam Group took out thousands of crores in loans from these two banks.
The company has stakes in these two shariah-based banks and is also a member of the board of directors of the banks.
The central bank usually appoints its top officials as observers to a bank when a lender’s financial health deteriorates due to financial scandals.
It has appointed observers to nine banks so far, including the latest two, to restore corporate governance in the financial sector.
Meanwhile, on 4 December, the High Court directed authorities concerned to probe reports of lending irregularities by Islami Bank Bangladesh Ltd (IBBL), Social Islami Bank Ltd (SIBL) and First Security Islami Bank Ltd (FSIBL).
The HC, issuing a suo motu (voluntary) rule, also directed the authorities of the banks in question to submit the names and addresses of officials who dealt with the loans.
The Anti-Corruption Commission (ACC), the Bangladesh Bank (BB), the Bangladesh Financial Intelligence Unit (BFIU), and the police’s Criminal Investigation Department (CID) have been asked to submit their findings by 5 April.
The HC bench has asked S Alam Group for an explanation on the reports that it took Tk30,000 crore from IBBL.
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