'Nasty November' for Islami Bank

According to documents provided to avail a bank loan, the office address of Nabil Grain Crops Limited was House No. 9, Road 23, Banani Block B. No office, however, was found there. Another company named Marts Business Limited’s address is given as House No. 13, Road 17, Banani Block D. But there is no such office there either. On the contrary, an office of Rajshahi’s Nabil Group was found there.  In the meantime, a gang has withdrawn Tk 20 billion from Islami Bank Bangladesh Limited (IBBL) using two companies that only exist on paper only , using these fake addresses.

An unscrupulous gang has withdrawn around Tk 70 billion through various ways using the names of 8 companies. Of the amount, a whopping Tk 24.9 billion was withdrawn only in the first seventeen days of this month (1-17 November). Due to this, the officials of the bank termed the month a ‘nasty November’.

According to documents provided to avail a bank loan, the office address of Nabil Grain Crops Limited was House No. 9, Road 23, Banani Block B. No office, however, was found there. Another company named Marts Business Limited’s address is given as House No. 13, Road 17, Banani Block D. But there is no such office there either. On the contrary, an office of Rajshahi’s Nabil Group was found there.  In the meantime, a gang has withdrawn Tk 20 billion from Islami Bank Bangladesh Limited (IBBL) using two companies that only exist on paper only , using these fake addresses. 

Not only IBBL, but these companies have also withdrawn Tk 23.2 billion from Social Islami Bank Limited (SIBL) and First Security Islami Bank. In total, these companies' loans with interest amount to Tk 95 billion from the three banks. The money was withdrawn in a time while liquidity crisis in the banking sector has become a concern after the dollar crisis.  This information was found from the documents of the three banks.

Bangladesh Bank has raised questions about around Tk 30 billion of the total amount. The companies which took the loan do commodity import business. The question has been raised whether a big portion of this hastily withdrawn money has already been siphoned off the country.

The grace period of the loan taken is one year. The repayment would be started after a year. So, the future of these loans would be fathomed after a year. Sources said the owners of Banks are the beneficiaries of these loans. One of the owners of the companies which withdrew the loan is from Chattogram and the other owners are from Rajshahi. Most of these companies are linked with Nabil Group.

Jahan Baksh Mandal is the chairman of Rashahi’s Nabil Group.   Md Aminul Islam is the managing director of the company and his wife Ishrat Jahan is chairman of Nabil Feed Mills. Other owners include Mokhlesur Rahman and Anowar Islam. Miftah Uddin of Chhattogram’s Banshkhali is the owner of one of the companies.

According to the company’s website, Nabil Group owns 17 companies including Nabil Naba Foods, flour mill, feed mill, auto rice mill, lentil mill, consumer products, Nabil farm and Nabil transport.

On-the-spot in Dhaka 

IBBL’s Gulshan-2 branch extended a loan of Tk 1.01 billion to Nabil food grains. The company got Tk 2.93 billion, Tk 4.31 billion and Tk 560 million on 6, 7 and 19 July respectively. A residential building was found in the address of the company shown in the bank documents. The building’s security officer Md Harun told Prothom Alo that the building is a residential one.

The officials of the branch told this correspondent that the company opened an account with the bank in March this year at the behest of the bank’s headquarters. Later money was disbursed as per the direction.

IBBL’s Farmgate branch extended loans worth Tk 9.81 billion to Marts Business Limited between 1 to 10 November. Nabil Group was in the Banani address of the company shown in the bank documents.

Two employees named Al Amin and Bulbul, who were present at the address, said Nabil Group does not have any company named Marts Business Limited. It was learnt that Nabil Group has bought the adjacent building recently.      

IBBL Farmgate branch’s manager Abdur Rab Mridha could not answer why the loan was disbursed to a company which does not even have any existence at the given addresses.

He told Prothom Alo that the head office would speak about the issue.

IBBL Gulshan branch disbursed Tk 12.24 billion to Naba Agro Trade International in April and July. No company was found in the address (15/2, Ahmadnagar, Rajshahi) shown in the bank documents. But a residential five-storied building of Nabil Group was found in the address. Nabil Group’s officials live in that building. Nabil Feed Mills took Tk 610 million loans from IBBL’s Rajshahi branch on 27 October using the same address.

A company named International Product Palace withdrew Tk 5.45 billion from Rajshahi IBBL on 4-6 September using the address of 21/4 Shiroil in Rajshahi’s Ghoramara. The company withdrew Tk 1.42 billion, Tk 2.5 billion and Tk 1.53 billion on 4, 5 and 6 September.

Naba Farm Limited withdrew Tk 6.4 billion from the same branch in a week in October using an address of Jhikrapara in Rajshahi’s Godagari. The company withdrew Tk 1.07 billion on 10 October, Tk 970 million on 11 October, Tk 2.44 billion on 19 October, Tk 530 million on 26 October and Tk 1.38 billion on 27 October. There is a poultry farm at the address given. The farm produced around 200,000 eggs daily. 

A company named Anowara Trade International withdrew Tk 10.9 billion loans from IBBL Rajshahi branch. The company used an address in Kharkhari bypass area in Rajshahi but so such company was found in the given address. But, there is an egg retail shop at the address. A signboard reads the company is a concern of the Nabil Group.

Shimul Enterprise took a loan of Tk 16.83 billion from IBBL Rajshahi branch in July and November using an address of Bherapora Bazar in Rajshahi’s Poba area. Shimul Enterprise took Tk 3.35 billion on 24 July, Tk 2.13 billion on 1 November, Tk 5.34 billion on 16 November and Tk 6.1 billion on 17 November.

No existence of any company named Shimul Enterprise was found in the address provided in Poba area. Several persons in the area said Shimul Enterprise has now become Nabil Industrial Park.  Nabil Group’s several companies including Nabil Auto rice mill, Nabil auto flour mills, Nabil feed mills, Nabil cold storage and Nabil lentil mills are located in the area. Around 300 permanent employees and 1000-1500 contractual employees work in the industrial park.

Md Aynal Haque, an assistant general manager of Nabil Industrial Park told Prothom Alo that they process rice and other products in the industrial park. The industrial park produces 150 tonnes of flour, 100-150 tonnes of rice, 100 to 150 tonnes of fish and poultry feed and around 200 tonnes of lentils. 

The amount of deposit and loans stands at Tk 17 billion and Tk 56 billion respectively at Rajshahi branch of IBBL. The IBBL head office provided money to its Rashahi branch in a bid to disburse loan to Nabil Group. Since companies owned by Nabil Group took Tk 5.01 billion of total loan, the Rajshahi branch has become hostage to this firm.

When asked whether Nabil Group owns all these companies, Nabil Group managing director Md Aminul Islam said, “I have been in business for 18 years and there is nothing to hide. The bank knows everything and they will speak about my loan.”

Nabil Group is an old client of the Islami Bank, but the company became clients of other banks too this year. After that, the loans of this conglomerate mounted in all banks.

Nabil Group opened account at Banani branch of “First Security Islami Bank Limited (FSIBL) at the beginning of this year in order to avail a the loan. Then its concerns Nabil Naba Foods, Nabil Feed Mills and Shimul Enterprise applied for Tk 1.2 billion in loan.

The FSIBL’s board of director approved Tk 5 billion as funded loan and Tk 7 billion as non-funded loan. The group has received Tk 3 billion in funded loan and process is on to release the remaining fund.

When FSIBL approved loan for Nabil Group, the firm has Tk 33.48 billion in funded loan and Tk 33.48 billion in non-funded loan to other banks.

When our correspondent went to the FSIBL head office for a comment, deputy managing director (DMD) Masudur Rahman Shah told Prothom Alo, “Nabil Group is our new client and loan that has been disbursed so far is still secure.”

“The firm is doing well in business; that is why loan has been approved. However, the conglomerate is not so desperate about getting the loan released. We are releasing loan based on adequate security.”

Nabil Naba Foods, Nabil Feed Mills and Shimul Enterprise became clients of Social Islami Bank Limited (SIBL) this year. The SIBL’s board of directors approved loan for these three clients in June this year. In the meantime, IBBL has lent a large amount to FSIBL and SIBL so that the latter can finance the borrowers.

When asked, SIBL managing director Zafar Alam told Prothom Alo, “The firms are doing good business, so we financed them. However, the entire fund of the approved limit is yet to be disbursed.”

These three Islamic banks disbursed these loans under Murabaha TR (trust receipt) facility. To invest in this method, there must be records of purchase of imported goods. According of the officials of these three banks, none of the banks have these records of product purchase.

Officials of these three banks informed Bangladesh Bank about entire issue unofficially and they are not receiving any response. Previously, the central bank went after these banks on grounds of irregularities and came back empty handed. So, central bank officials are silent now.

The existing IBBL’s board of directors consists of members mostly nominated by various companies of a large business group based in Chattogram, and the board, too, has no foreign representative. IBBL chairman and former professor of Dhaka University Mohammad Nazmul Hassan and IBBL vice chairman and former commissioner of Anti-Corruption Commission Mohammad Shahabuddin are the group representatives in the board.

Chairman Nazmul Hassan could not be reached for comment over phone.

Speaking to Prothom Alo, vice chairman Mohammed Shahabuddin said, “Not all issue is discussed at the board, many issues are approved beforehand. The chairman gives opinion once an issue is raised at the board. However, everything is running as per rules and regulations.”

IBBL managing director Mohammed Monirul Moula told Prothom Alo, “The loan of Nabil Group is Tk 3-4 billion and they are our old clients. All other firms are trading companies and they do not have any proper set up, that is why their offices are not be found at their offices. Nothing wrong takes place at Islami Bank and whatever it is happening at the bank everything is being done as per rules.”

Once IBBL was one of the country’s reputed banks with renowned business groups as its clients. Those clients had been forced to leave the bank seven years after change in the bank ownership. Many little-known companies have become their top clients now.

Former Bangladesh Bank governor Salehuddin Ahmed told Prothom Alo, “It was a wrong decision to change the bank ownership in such way. It must be seen whether the companies to which loans are provided, are doing properly business.

“Such large-scale irregularity must not be tolerated by any means during this economic crisis. Bangladesh Bank must step up monitoring these issues and not wait for instructions from above.

*(Abul Kalam from Rajshahi and Shafiqul Islam from Dhaka contributed to this report.)

*This report appeared in the print and online edition of Prothom Alo and has been rewritten in English by Galib Ashraf and Hasanul Banna