THE severity of financial mismanagement in eight banks controlled by the S Alam Group is shocking. Financial mismanagement in the eight banks — Islami Bank Bangladesh, First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, Al-Arafah Islami Bank, National Bank, and Bangladesh Commerce Bank — and the collusion between the central bank and the private institution made the headlines even before the fall of the Awami League government, which helped the entity take control of the banks and embezzle and launder a huge amount of money. The central bank, under a new leadership after the fall of the Awami League government, has reconstituted all the eight banks and appointed independent directors to oversee operations. The newly-appointed Islami Bank Bangladesh chair disclosed on September 5 that the S Alam Group had withdrawn more than Tk 90,000 crore in loans violating all rules. The amount is more than a half of the shariah-based bank’s total loan portfolio. The group secured the loans both in their name and through anonymous accounts by inflating the value of its assets. The group was entitled to borrow a maximum of Tk 215 crore from Islami Bank Bangladesh.
Bank insiders, meanwhile, allege that the Group has withdrawn about Tk 2 lakh crore from the banking sector, primarily from the eight banks, and much of the amount was funnelled through anonymous channels. What was more shocking is that the central bank, under the previous governor, provided all liquidity support to the banks despite knowing that they continued allowing the group to withdraw money in anonymous loans. Such support was extended although the banks’ current accounts remained negative, leaving them incapable of making any transactions. The central bank, after exhausting all legal avenues, resorted to unethical and illegal means to provide the banks with additional liquidity. The central bank printed money to keep them afloat. Since January till the Awami League’s fall, the central bank provided $1.1 billion equivalent in financial support for Islami Bank Bangladesh based on a fake dollar purchase quotation. Besides such financial scams and irregularities, the group and its owner are also alleged to have laundered a huge amount of money. Media reports earlier reported that the group owner Mohammad Saiful Alam had built a business empire in Singapore worth at least about $1 billion although there was no record of him taking any permission from the Bangladesh Bank to invest or transfer any funds abroad.
The Awami League regime protected the group and offered sort of impunity for those involved in the financial mismanagement. The authorities, especially the Bangladesh Bank, must now investigate and disclose the length and volume of financial mismanagement that occurred in the banks fully or partially controlled by the group. The authorities must then hold all the offenders to justice.
