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NBL logo

When the government changed in 2009, so did the board of directors of National Bank Limited (NBL). Chairman of Sikder Group, Zainul Haque Sikder, took control of the bank. By including his wife, sons and daughter relation and Awami League leaders on the board of directors, the banks went under sole control of the Sikder family. After that no businesspersons were allowed to come near the bank, least of all the board. And that was when the wealth of Sikder family began to expand in leaps and bounds, both home and abroad. On the flip side, the bank suffered financially.

The Sikder Group has businesses in many other sectors – insurance, power, health, education, housing, construction, hotels, tourism, aviation and more. It has investments in the US, UAE, Thailand, UK, Singapore, Switzerland and several other countries. Questions have arisen concerning the source of these overseas investments.

Bangladesh Bank appointed an observer in 2014 to look into the unwarranted interference of the board and dubious loans being taken in various names from NBL. Despite such emergency measures, the bank’s downslide could not be impeded and today NBL is among the weakest banks of the country.

According to Bangladesh Bank reports, much of the loans disbursed by NBL have gone to accounts of the Sikder family and the accounts of their numerous companies. The family is also siphoning off money from the bank under various other names and identities.

The law permits up to four members of the same family to remain on the board of a bank, but there are five members of the Sikder family on the NBL board. It is as if no laws or regulations are applicable to the Sikders, not even supervision of the central bank.

Zainul Haque Sikder is the chairman of NBL’s present 11-member board of directors. The directors include his wife Monwara Sikder, daughter Parveen Haque Sikder, and sons Rick Haque Sikder and Ron Haque Sikder. Former official of NBL, Badiul Alam, is also there, representing Sikder Insurance. The other directors have no say in decision making and many do not even attend the board meetings regularly.

The Sikder family siphoned off money from the bank in the form of loans to Hasan Telecom, a company which they conjured up for the purpose.

According to the bank’s financial report, its default loans have escalated exponentially over the last decade. In 2009 the bank’s dealt loans totalled Tk 3.88 billion (Tk 388 crore). In March this year, the default loans stood at Tk 27.76 billion (Tk 2,776 crore). Among the private banks, National Bank has the highest amount of loans written off, but even so it has not been able to lessen its default loans.


The written off loans last year amounted to Tk 21.54 billion (Tk 2,154 crore). A report of the central bank said that even though the bank could not recover loans from several companies, it is not enlisting these as default and so the actual picture of its default loans is not revealed.

The bank is also unable to show the required reserves against the loans which it is depicting as default. Last month it had Tk 4.87 billion (Tk 487 crore) deficit in reserves. Investors who bought shares in the bank are now counting losses. The share which cost Tk 10 each is now just Tk 7.

These facts and figures were found in National Bank’s financial reports of the past decade or so, the central bank’s inspection reports and reports of the Bangladesh Financial Intelligence Unit (BFIU).

National Bank is one of the first generation private banks in the country. It was founded in 1983 and its first chairman was the Chittagong University founding vice chancellor and former finance minister Azizur Rahman Mallick. Even though he had no shares in the bank, the founders kept him as chairman for the first 10 years. Later the chairman was selected from among the shareholders. National Bank had a good reputation at the time.

It was not possible to meet the National Bank managing director Choudhury Moshtaq Ahmed at the bank’s head office or to speak to him over the cell phone. However, Prothom Alo spoke to the bank’s additional managing director (AMD) SM Bulbul Ahmed at 3:37pm on Friday. He denied almost all the allegations that have been raised.

When asked about the towering default loans of the bank, he said. “You all only see the negative side. You fail to see anything good, particularly in the banking sector.”

About more than four members of the same family being on the bank’s board, SM Bulbul Ahmed said that the matter is under trial in court. The case with the central bank in this regard has not been resolved as yet.

Fake loan beneficiaries

The Sikder family siphoned off money from the bank in the form of loans to Hasan Telecom, a company which they conjured up for the purpose. The loan application, approval and disbursement all took place towards the end of 2018. Of this, Tk 1 billion (Tk 100 crore) was withdrawn in November and the remaining Tk 3.85 billion (Tk 385 crore) in the next three months. Chairman of Hasan Telcom, Arif Hasan, is the deputy managing director of a private television channel.

BFIU report states that Tk 640 million (Tk 64 crore) of the loan provided to Hasan Telecom was deposited directly to the accounts of NBL director Rick Haque Sikder, chief operating officer of Sikder Group, Syed Kamrul Islam (Mohan) and two companies of Sikder Group, PowerPac and Sikder Real Estate. Bangladesh Bank submitted its inquiry report in this regard to the Anti-Corruption Commission (ACC), but ACC has taken no action.

The report stated that the bank first disbursed a loan of Tk 1 billion (Tk 100 crore) in the name of Hasan Telecom on 29 November 2018. On the very same day Tk 200 million (Tk 20 crore) was deposited in NBL director Rick Haque Sikder’s bank account, Tk 102.8 million (Tk 10 crore 28 lakh) in the account of Sikder Group’s COO Syed Kamrul Islam and Tk 100 million (Tk 10 crore) in the account of PowerPac, a company owned by the group. With the remaining amount, Arif Hasan opened savings accounts of various terms in his own name with National Bank.

On 2 December of the same year another Tk 1 billion (Tk 100 crore) was disbursed. Of this, Tk 38 million (Tk 3 crore 80 lakh) was deposited on 4 December in Rick Haque Sikder’s account at the bank’s West Dhanmondi branch. On 10 December Tk 200 million (Tk 20 crore) was deposited in the account of Sikder Real Estate. The rest of the money was paid in cash as well as deposited in various accounts of Arif Hasan. In January and February 2019, the bank released another Tk 600 million (Tk 60 crore) which was withdrawn in cash by Arif Hasan.

Bangladesh Bank’s report says that Arif Hasan, National Bank’s board of directors and a number of their companies took the Tk 3.35 billion (Tk 335 crore) against a fictitious work order for supply of goods. They split up the remaining Tk 1.5 billion (Tk 150 crore) too.

When the National Bank AMD ASM Bulbul was asked how the Hasan Telecom loan went into the bank accounts of Syed Kamrul Islam alias Mohan and PowerPac, he said that nothing of the sort happened. Later, however, he said that it must be accepted that in the prevailing times, no business can adhere to the regulations one hundred per cent, not even banks.


Further benefits

In 2017, two of the banks’ top defaulters were IPSU Trading and Cambridge International. IPSU owed Tk 1.45 billion (Tk 145 crore) and Cambridge International Tk 1.35 billion (Tk 135 crore). These loans had been made in 2013. In 2015 Bangladesh Bank had raised question regarding the irregularities, use and beneficiaries of the loans.

Once trust is lost, the entire banking sector will be under pressure, which will not be good for the country’s economy. There must be a merging of banks. The banks will then be able to emerge from the control of these families.
Mainul Hasan, former professor of Chittagong University’s department of economics

According to the central bank report, within two days of IPSU Trading opening an account with NBL’s Nimtali branch on 21 April 2013, a loan of Tk 400 million (Tk 40 crore) was released. These funds were used to purchase floors of Sikder Real Estate’s ZH Sikder Shopping Complex. The price per square foot of this shopping complex in Sirajdikhan upazila of Munishiganj was shown to be Tk 12,820, which was many times higher than the actual market price.

Then on 13 May 2013, Cambridge International opened an account with the bank’s Shimanta Square branch and applied for a Tk 1.32 billion (Tk 132 crore) loan. The loan was approved by the banks executive committee the very next day. Then through pay orders of Tk 550 million (Tk 55 crore) on 22 May, Tk 550 million (Tk 55 crore) on 27 May and Tk 410 million (Tk 41 crore) on 28 May were issued in favour of the building seller and director of the bank Monowara Sikder. Here too the floor price was shown as Tk 12,000 per square foot. The actual beneficiary of these deals was the Sikder family, according to Bangladesh Bank. When Prothom Alo asked how the Cambridge and IPSU funds went to Sikder Real Estate, SM Bulbul responded, “How can you say so? Is this a Bangladesh Bank observation? Bangladesh Bank hasn’t informed me about any such thing.”

No recovery and yet no default

In an inspection report of 2018, Bangladesh Bank said that when a loan taken by Premier Property Development, owned by the Premier Bank chairman HBM Iqbal, could not be adjusted within the limits, Bangladesh Bank instructed that the loan be enlisted as default. But instead of doing that the company’s Tk 2.240 billion (Tk 224 crore) loan term was simply extended again and again.

The loan taken by Shop in Trade, owned by the Exim Bank director Khandaker Nurul Asfar, was also rescheduled four times. Even though the loan had defaulted four times before, the bank did not inform the Credit Information Bureau (CIB) and didn’t even enlist it as a default loan. So Khandaker Nurul Asfar remained director of the bank.

Hamid Real Estate’s loan remained unpaid in the first 9 months of 2018, but was not made default. Similarly, outstanding loans of Asfar Real Estate, Friends Multi Trade Company and Messrs Chittagong Syndicate were not enlisted as default.

Saad Musa Group’s loans stood at Tk 11.34 billion (Tk 1134 crore) in 2018. Though a large amount was in default, it remained unclassified. The company bought 1600 decimals of land in Gazipur from the owner of Maisha Group, Aslamul Huq MP, the value shown on paper as was Tk 300 million (Tk 30 crore). Yet Tk 1.58 billion (Tk 158 crore) was borrowed from the bank for this purpose. This land was used to increase the loan limit.


Discrepancies and money laundering

Bangladesh Bank has found a multitude of discrepancies in the loan provided to Millennium Group by National Bank Limited. The group in 2016 had default loans totalling Tk 14.62 billion with various banks (Tk 1462 crore), but the court had issued a stay order on declaring these default. In 2016 National Bank increased the loan ceiling of the group to Tk 3.34 billion (Tk 334 crore), which has increased ever further now. This is the family business of former foreign minister Morshed Khan.

Concerning the discrepancies in the loan of Millennium Group, the bank’s AMD SM Bulbul told Prothom Alo that Millennium’s loan had gone into default and they had applied for it to be rescheduled. They were now waiting for Bangladesh Bank’s approval.

Meanwhile, the bank is financing the setting up of Index Power and Energy Unit-1. In the beginning the board gave its approval for the capital machinery and vessel to come from Korea, but it later came from British Virgin Islands. Incidentally, British Virgins Islands is known for offshore banking where money can be laundered. The bank repeatedly changed its decisions for Index Power, even regarding the volume of imports. And the company went about transferring its money from one account to the other, even to unrelated firms.

The central bank’s inspection report pointed to indications of money laundering in the local and foreign transactions of Messrs Index Power and Energy and Index Power and Energy Unit-2. However, under pressure, Bangladesh Bank could not go too far in its investigations.

Concerning these indications of money laundering, SM Bulbul told Prothom Alo, “The central bank has told us nothing about this. Index is involved in a project at Mongla port and is storing supplies there.”

Humiliation and insult

Bangladesh Bank in 2014 discovered serious loan irregularities in two branches of the bank. These loans were given to persons of other names, but the Sikder family was the actual beneficiary, Bangladesh Bank pointed out. The blame was simply placed in the bank’s MD AKM Shafiqur Rahman and he was humiliated. He was forced to resign as MD on 1 October that year.

It was during the Eid holidays at the time and the manner in which the MD was insulted drew strong reaction from the banking sector. During the Eid closure in October 2014, Bangladesh Bank appointed an observer to the bank. Order is still not restored to the bank and so Bangladesh Bank has not withdrawn its observer.

Next Shafiqul Islam was appointed as MD and he too resigned before the end of his term. On 1 February 2017 Choudhury Moshtaq Ahmed was given responsibility as MD and on 29 January 2018 the central bank approved the appointment.

The bank had been without an MD for about a year. The Bank Company Act maintains that the post of MD in any bank cannot remain vacant for more than three months. If it does not appoint an MD in this time, Bangladesh Bank can appoint an administrator. The central bank, however, did not proceed in this direction.

Choudhury Moshtaq Ahmed was present at the time the Exim Bank MD was shot at and he can even be seen in the picture. The bank’s AMD SM Bulbul is also in the picture. Many members of the bank’s managing committee are party to the illegal activities of the Sikder family. Other bankers are perturbed with these matters.

Commenting on this state of the country’s banking sector, former professor of Chittagong University’s department of economics, Mainul Islam, told Prothom Alo that this scope was created because the ownership of the bank is centred on one family. If the bank is fully in their control, they can take money out in this manner. One person has seven or eight banks. A law much be enacted to prevent this.

Mainul Hasan went on to say, such loan sharing is putting the banks into further risk. Once trust is lost, the entire banking sector will be under pressure, which will not be good for the country’s economy. There must be a merging of banks. The banks will then be able to emerge from the control of these families.