Photo : Collected
The Bangladesh Bank has dissolved the board of directors of the Social Islami Bank Limited (SIBL).
The central bank's banking regulations and policy department announced the decision today (25 August) in a letter addressed to the managing director of SIBL.
The central bank also formed a new five-member board which has one director and four independent directors, said the letter.
Major (retd) Dr Md Rezaul Haque, the bank's founding shareholder, has been appointed as the director of the new board.
The four independent directors are Maksuda Begum, a former executive director of the Bangladesh Bank; Dr M Sadiqul Islam, a professor at the Department of Finance at Dhaka University; Md Morshed Alam Khandkar, a former deputy managing director of Rupali Bank; and chartered accountant Md Anwar Hossain.
Since the Awami League government assumed power, SIBL has been under the control of the S Alam Group, a business conglomerate with a history of alleged irregularities and corruption.
S Alam Group is alleged to have engaged in irregularities and corrupt practices within SIBL, particularly in the areas of recruitment and loan disbursement.
Following the allegations, the Bangladesh Bank dissolved the existing board of directors, which was dominated by S Alam Group representatives, and appointed a new board to oversee the bank's operations.
According to a confidential Bangladesh Bank report, Social Islami Bank concealed Tk7,936 crore in defaulted loans with the help of a central bank official.
According to the inspection report, the defaulted loans at the end of December 2023 amounted to Tk9,568 crore, but Social Islami Bank reported only Tk1,644 crore to the money market regulator.
The inspection team identified discrepancies in financial reporting by conducting on-site visits to five main branches, off-site reviews of 10 branches, and inspections of seven branches outside Dhaka as of 31 December 2023.
The central bank concealed the true financial state of Social Islami Bank, later reporting that the bank's total provisioning requirement was Tk1,370 crore, of which the bank had met Tk1,306 crore, leaving only a Tk64 crore shortfall.
The central bank's report noted that the banking sector was facing challenges due to a lack of sufficient foreign exchange for imports, efforts to protect the financial reputation of banks, the need to reduce LC margin costs, and global abnormal inflation.
Messenger/Sajib
