Newly appointed board of directors of Islami Bank Bangladesh PLC on Tuesday decided to look into all kinds of loans, their disbursement process, borrowers’ identity and proper collateral against these loans.
The board of directors made the decision at its first board meeting on the day.
On August 21, the central bank dissolved previous Islami Bank board to free it from the control of S Alam Group and decided to appoint independent directors temporarily to manage the bank.
It restructured the bank board on the following day, appointing five independent directors, with former Rupali Bank managing director and chief executive officer Md Obayed Ullah Al Masud as the board’s chairman.
At the first board meeting of the new board, it has also been decided to look into where the treasury department of the bank had invested money and dollars.
Apart from this, an initiative has been taken to check whether the manpower that has been recruited in the past seven and a half years has been done following the proper process or not.
To review all these irregularities, the bank will appoint three separate external auditors.
The government had seized all shares held by the Chattogram-based S Alam Group and its associates in Islami Bank and planned to sell those shares later to recover the Group’s liabilities to the bank.
The media reported that S Alam Group, backed by the Awami League-led government, made hostile takeover of Islami Bank in 2017 and since then, the Group had acquired about Tk 75,000 crore loans from Islami Bank alone anonymously.
Most of these loans were laundered and never used in any company in the country, according to the media reports.
After such a massive loan withdrawal, the Shariah-based bank fell into serious liquidity shortage and led the bank to resort to the Bangladesh Bank bailout.
The bank’s current account with the central bank turned negative, meaning that the bank was surviving only on the central bank’s support.
The changes in the bank board came after Sheikh Hasina resigned as prime minister and fled to India on August 5 amid a student-led mass uprising against her authoritarian rules.
