When different financial irregularities came to light in 2023, Islami Bank plunged into a liquidity crisis. The authorities took special initiative to boost deposit collection and set individual targets for officials.
Later, the board of directors decided to reward 13,500 successful officers with suit pieces. No officials received any suit piece till date, but the allocation – Tk 63 million – has already been spent.
In the same year, Islami Bank took an initiative to boost remittance to tackle the dollar crisis. It decided to purchase 100,000 umbrellas to give to top remitters. No umbrellas were ever provided to the bank, but Tk 55 million has been withdrawn on this purpose.
The bank spent around Tk 120 million on two fictitious purchases between August and October last year, according to internal documents. However, the real beneficiaries of the funds remain untraced.
The funds for the suit fabric were funneled through a businessman’s account in Chattogram and then transferred to three other accounts on the same day. The total amount was withdrawn immediately. Thus, the beneficiaries kept themselves out of sight.
Where did the money go?
Islami Bank, in a board meeting on 26 July 2023, decided to reward a total of 13,522 officials with suit fabric. Its client Belmonte Fabrics was awarded the order.
On 29 August, invoices and bills were submitted on behalf of Belmonte, though no fabric was delivered in reality. Despite being aware of the issue, the bank’s chief financial officer, Farid Uddin, requested authorisation to process the payment, while managing director Mohammed Monirul Moula approved it immediately.
According to records, Islami Bank transferred an amount of Tk 63.5 million to the client’s account on 30 August. On the same day, the fund was withdrawn from Belmonte's account with two cheques.
Belmonte owes nearly Tk 500 million to the Elephant Road branch of Islami Bank, and with a signed cheques submitted as security. When a loan defaults, the bank uses the cheque to file a case. A bank official said the amount was withdrawn using two security cheques of Belmonte.
In this regard, the managing director of Belmonte, Mohammad Badsha, said, “We received an order to supply suit fabric. As far as I recall, the order was never delivered. We have around Tk 500 million in loans at the bank, and security cheques are submitted against it. The funds might be withdrawn using those cheques.”
According to documents, a total of Tk 60 million – Tk 40 million and Tk 20 million in two phases – was deposited in cash from the Elephant Road branch to Masud Fish Processing and Ice Cream Limited of the Khatunganj branch in Chattogram. The entire amount was withdrawn from the branch through three cheques on the same day.
Masud Fish is an old client of Islami Bank and has a loan of Tk 500 million from the Khatunganj branch. It also submitted signed cheques for security.
Ashraf Hossain Masud, managing director of Masud Fish, claimed to have no connection with S Alam Group. “Though we are from Patiya, we have no relations with S Alam Group. Upon a request from the Khatunganj branch manager and second officer, I allowed them to use my account. Now, I have understood that it was a mistake to allow them to use my account and three cheques.”
He also said that they have been a client of the bank since 1988-89, but faced non-cooperation from the bank during the last few years. Hence, he permitted the bank to use his account, in the face of pressure.
During all these transactions, Islami Bank was under the control of Chattogram-based S Alam Group, led by Saiful Alam. His personal secretary and some other close associates were in leading positions in the bank, including the position of deputy managing director. Officials said the particular officers were engaged in clearing the fund.
Allocation for umbrellas
In its 329th board meeting on 20 September last year, the bank approved the purchase of 100,000 umbrellas and awarded the contract to Express Communications. It submitted invoices and bills on 10 October, without delivery of the umbrellas.
CFO Farid Uddin requested the funds, and MD Mohammed Monirul Moula approved it. Later, the bank issued a pay order of Tk 55 million to Express Communications, and it was cashed immediately.
Deepak Ghosh, owner of Express Communications, said, “I had a business partner named Abul Khair. He handled the delivery process of the gifts to the bank. However, he has no longer been with us for the last six to seven months.”
When asked about the issue, Abul Khair said, “I have no idea about the issue.”
The managing director of Islami Bank, MD Mohammed Monirul Moula, could not be reached for comment, while the central bank said a forensic audit could reveal the real beneficiaries of these irregularities in the future.