After taking control of Islami Bank Bangladesh, the S Alam Group and its affiliated organisations borrowed approximately Tk 730 billion - accounting for nearly 50 per cent of the bank’s total loans.
Following the fall of the government of Bangladesh Awami League, a new board of directors was appointed to Islami Bank. The new board began inspecting various projects tied to the group in Chattogram and Rajshahi and initiated efforts to recover the loans.
The bank’s management committee even held an online meeting with the chairman of the S Alam Group, Mohammad Saiful Alam, to discuss repayment. However, Alam is yet to respond, and the loans are now on the brink of default.
The S Alam Group, a Chattogram-based business conglomerate known for its close ties to former Prime Minister Sheikh Hasina, took over Islami Bank in 2017.
Following the takeover, the group allegedly withdrew a massive sum of money anonymously, facilitated by changes made to the bank’s board of directors and management.
Loans were also approved under the names of various entities connected to the group. After Sheikh Hasina’s government fell, the central bank dissolved the board of Islami Bank on 22 August and appointed a new one.
Former Bangladesh Bank chief economist Mustafa K. Mujeri told Prothom Alo that it would have been better if a solution to recover the debt had been reached through discussions with the borrowers.
Since they took the money, they should have taken the initiative to discuss repayment. But the reality is that their influence is so immense, they appear to fear no consequencesFormer Bangladesh Bank chief economist Mustafa K. Mujeri
“Since they took the money, they should have taken the initiative to discuss repayment. But the reality is that their influence is so immense, they appear to fear no consequences. Now it is up to Bangladesh Bank and the government to determine how this money will be recovered,” he stated.
Mujeri further suggested that pursuing legal action to recover the loans could result in prolonged delays.
He proposed forming a special bench in the High Court to expedite the trial if a case is filed. If this incident is properly adjudicated, it will send a strong message to other defaulters, he added.
Board of Directors to inspect projects
After taking charge, the board of directors and management committee, led by Obayed Ullah Al-Masud, the newly appointed chairman of Islami Bank, visited the head office and various factories of the S Alam Group in Chattogram to address debt recovery. Despite the presence of S Alam Group’s executive director and senior officials, they did not say anything regarding the loans.
Documents reveal that S Alam Group directly borrowed Tk 561.18 billion from Islami Bank, with an additional Tk 75.24 billion acquired indirectly. These loans were disbursed through the bank’s Khatunganj, OR Nizam Road, and Pahartali branches in Chattogram, as well as the Gulshan no. 1 branch in Dhaka.
Whereas Islami Bank’s policies cap loans to a single business group at Tk 5 billion, this limit was significantly exceeded in the case of S Alam Group.
Meeting with S Alam
Saiful Alam controlled Islami Bank for nearly eight years. Following instructions from the new board of directors, the bank’s Managing Director, Mohammed Monirul Moula, and other senior officials held an online meeting with him in early November. During the meeting, S Alam Group’s Chief Financial Officer, Subrata Kumar Bhowmik, was physically present at the bank.
The massive embezzlement of funds by a single business group has already been dubbed the largest financial scam in the country’s history
In the meeting, Islami Bank informed Saiful Alam that his direct and indirect loans from the bank amounted to approximately Tk 730 billion, much of which was on the verge of becoming defaulted. The growing number of defaulted loans was severely impacting the bank’s operations, exacerbating a liquidity crisis.
Saiful Alam was urged to repay Tk 100 billion immediately. In response, he requested an opportunity to continue his business, assuring that he would repay the amount associated with his name. However, he claimed to have no knowledge of other outstanding loans.
The bank proposed a compromise, suggesting that for every Tk 100 repaid, the bank would deposit Tk 20 and issue a fresh loan of Tk 80. This, they believed, would enable the business to function while gradually recovering the debt.
Despite this arrangement, the bank has received no response from the S Alam Group as nearly a month and a half has gone by. Meanwhile, most of the group’s loans have started becoming defaulted, according to bank officials.
Prothom Alo tried to contact Saiful Alam and Subrata Kumar Bhowmik for comments but to no avail, as neither responded.
It has been reported that since the interim government assumed office, Islami Bank has begun ascertaining the true state of its loan records. Consequently, the amount of defaulted loans has been rising rapidly.
In June, defaulted loans at Islami Bank stood at Tk 77.24 billion. By September, this figure had surged to Tk 177.51 billion—an increase of Tk 100 billion in just three months.
Waiting for audit report
The new board of directors has tasked four audit firms (CA firms) with assessing the true state of Islami Bank’s loans, beneficiaries, collateral values, and manpower recruitment. These firms have indicated that they will submit their final reports later this month. Interim reports, however, have already highlighted loans amounting to Tk 730 billion.
Officials involved in the matter have confirmed that Islami Bank has concluded that S Alam Group is unlikely to repay the loans through regular channels.
As a result, the only viable option for recovering the debt is through legal action, which the authorities are now considering. They are awaiting the final reports from the audit firms to proceed.
Senior bank officials have stated that legal measures will include selling off the assets owned by S Alam Group.
According to the bank, these assets include vast tracts of land in Dhaka, Chattogram, and Gazipur, a power plant, and shares in various factories and institutions.
The massive embezzlement of funds by a single business group has already been dubbed the largest financial scam in the country’s history.
This misappropriation of funds occurred with the alleged support of the then-governing Bangladesh Awami League. Sources within Islami Bank have revealed that significant violations of financial sector laws and regulations were committed in facilitating these loans.
The bank’s chairman and managing director were summoned for inquiries regarding the matter, but they failed to respond.
Despite this arrangement, the bank has received no response from the S Alam Group after nearly a month and a half. Meanwhile, most of the group’s loans have started to default, according to bank officials.
Prothom Alo tried to contact Saiful Alam and Subrata Kumar Bhowmik for comments but to no avail, as neither responded.
It has been reported that since the interim government assumed office, Islami Bank has begun reflecting the true state of its loan records. Consequently, the amount of defaulted loans has been rising rapidly.
In June, defaulted loans at Islami Bank stood at Tk 77.24 billion. By September, this figure had surged to Tk 177.51 billion—an increase of Tk 100 billion in just three months.
Waiting for audit report
The new board of directors has tasked four audit firms (CA firms) with assessing the true state of Islami Bank’s loans, beneficiaries, collateral values, and manpower recruitment. These firms have indicated that they will submit their final reports later this month. Interim reports, however, have already highlighted loans amounting to Tk 730 billion.
Officials involved in the matter have confirmed that Islami Bank has concluded that S Alam Group is unlikely to repay the loans through regular channels.
As a result, the only viable option for recovering the debt is through legal action, which the authorities are now considering. They are awaiting the final reports from the audit firms to proceed.
Senior bank officials have stated that legal measures will include selling off the assets owned by S Alam Group.
According to the bank, these assets include vast tracts of land in Dhaka, Chattogram, and Gazipur, a power plant, and shares in various factories and institutions.
The massive embezzlement of funds by a single business group has already been dubbed the largest financial scam in the country’s history.
This misappropriation of funds occurred with the alleged support of the then-governing Bangladesh Awami League. Sources within Islami Bank have revealed that significant violations of financial sector laws and regulations were committed in facilitating these loans.
The bank’s chairman and managing director were phoned to talk in this regard, but they did not respond.
* The report, originally published in the print and online edition of Prothom Alo, has been rewritten in English by Farjana Liakat