A recent Bangladesh Bank inspection has revealed that employees of banks previously controlled by S Alam Group systematically facilitated massive, unrecorded cash withdrawals for the controversial conglomerate.
Cash was withdrawn on a daily basis amounting to Tk 2,000 crore in total between January and July 2024 and funneled to S Alam Group, bypassing all regulatory oversight and proper documentation.
The investigation, conducted at Islami Bank鈥檚 Khatunganj Branch in December 2024, revealed that Famous Trading Corporation, Rainbow Corporation, Ansar Enterprise, Global Trading Corporation Ltd, and Sonali Traders鈥攃ollectively withdrew nearly Tk 2,000 crore in cash from their current accounts at the branch.
Most of these withdrawals鈥擳k 1,486.37 crore鈥攚ere collected by employees or representatives of S Alam Group, one of the country鈥檚 most controversial conglomerates.
Another Tk 253.96 crore was moved through inter-branch transactions before being withdrawn elsewhere.
Between January 2020 and August 2024, these accounts saw a total cash withdrawal of Tk 3,245.56 crore聽 from the bank鈥檚 Khatunganj Branch with no verification of the recipients.
Withdrawals were processed using bearer checks, with illegible or incomplete signatures, and national identity verification was deliberately ignored.
Branch authorities admitted that they acted on verbal orders from senior officials of S Alam Group and Islami Bank head office.
Islami Bank鈥檚 former deputy managing director Miftah Uddin and chief human resources officer Akij Uddin reportedly issued direct instructions for daily disbursements.
Islami Bank鈥檚 current managing director Monirul Mawla did not respond to phone calls made for comments in this regard. Miftah Uddin and Akij Uddin have gone into hiding following the fall of the Awami League-led government on August 5.
Cash was either collected by S Alam Group staff or withdrawn by bank officials for distribution to various locations, including other banks under the group鈥檚 control.
In an effort to hide these illicit transactions, Islami Bank used its Suspense Account to adjust unaccounted for withdrawals, with Tk 45.47 crore being moved through 43 Suspense Account debits between October 2022 and August 2024.
But, Tk 17.70 crore still remains unadjusted, highlighting the scale of the misconduct.
Despite the clear evidence of financial wrongdoing, Islami Bank failed to report the suspicious transactions to the Bangladesh Financial Intelligence Unit, breaching the Money Laundering Prevention Act.
It was only after Bangladesh Bank鈥檚 investigation exposed the scheme that the bank belatedly filed Suspicious Transaction Reports for a few of the implicated companies.
M Masrur Reaz, chairman and chief executive officer of non-governmental think tank Policy Exchange Bangladesh, told 抖阴精品 that banks had been controlled and looted by oligarchs, but these individuals were removed now.
He added that a proper assessment was underway through both international and domestic audit firms, with the expectation that the true extent of the damage to these banks would soon be identified.
Reaz also mentioned that the central bank would examine any further risks in these banks and take necessary actions to address them.
Furthermore, he emphasised that all errant individuals, including board members and bank executives, must be held accountable for their actions.
The malpractices extended beyond cash withdrawals, with widespread misuse of inter-branch credit advice, IBCA in short, transactions, according to the Bangladesh Bank report.
Between June 2023 and August 2024, Tk 334.18 crore was withdrawn via 83 IBCAs from 11 branches and sub-branches, often transferred to unauthorised individuals, money changers, bKash agents and bank employees, entirely bypassing financial regulations.
The BB report found involvement of individuals with no legitimate business ties, such as Ahad (Hubaib Uddin Ahad), who withdrew Tk 6.89 crore in cash through 7 IBCAs, despite having no legitimate claim to the funds.
Further investigations revealed his involvement in suspicious fund transfers and possible links to illegal hundi transactions.
Other significant withdrawals from Islami Bank included Tk 30.81 crore by SM Jamal Uddin, a senior official at First Security Islami Bank, and Tk 73 crore by Mohammad Ali, a cash officer at Union Bank PLC.
Multiple instances of financial misconduct were uncovered, with even a security guard at Islami Bank鈥檚 Training Academy withdrawing Tk 5 crore from Islami Bank, allegedly delivered to Akij Uddin鈥檚 office.
In another case, Islami Bank鈥檚 Gulshan Circle-1 branch issued Tk 10 crore in pay orders to four individuals鈥攖wo housewives and two students鈥攚ithout proper documentation, following instructions from managing director Monirul Mawla.
This violation of banking regulations facilitated the further misappropriation of funds linked to S Alam Group.
S Alam Group has amassed a staggering Tk 2.25 lakh crore in loans from 10 banks and a non-bank financial institution.
These loans are now turning into defaults, pushing Bangladesh鈥檚 banking sector into a severe crisis.
According to the Bangladesh Financial Intelligence Unit, nearly 44 per cent of these loans were taken through shell companies and anonymously, with Tk 97,486 crore being siphoned off in this manner.