Inflated rents, ghost floors, Tk220cr advance: How Premier Bank funds lined Iqbal family’s pocket

While fictitious loans dominate headlines about Bangladesh's troubled banking sector, a more sophisticated, seemingly legal scheme has drained millions from Premier Bank, allegedly orchestrated by its long-time founding chairman, HBM Iqbal. 

A recent Bangladesh Bank inspection has peeled back layers of questionable dealings, revealing how the bank was allegedly used as a personal ATM for the Iqbal family's property and other businesses, even as its non-performing loans (NPLs) soared. While others gave loans to fictitious names, Iqbal perfected a more subtle extraction model: he rented out his own building, the Iqbal Centre in Banani, to the very bank he chaired.

HBM Iqbal, a former Awami League lawmaker, chaired Premier Bank from its inception in 1999 until his resignation on 12 January 2025, following the fall of the Sheikh Hasina government. 

During his tenure, a pattern of exorbitant payments to family-owned entities emerged, raising serious questions about governance and accountability.

The Iqbal Centre rent rip-off

At the heart of the scandal is the Iqbal Centre in Banani, owned by HBM Iqbal, which served as Premier Bank's headquarters. The bank consistently paid rent three to four times higher than the prevailing market rates. 

A Bangladesh Bank report indicates that since signing a new contract in 2021, Premier Bank has been overpaying by at least Tk60 crore annually. 

For context, nearby premium office spaces like SMC Tower charge around Tk130 per square foot, while Premier Bank was paying Tk440-Tk462 per square foot. 

The report calculates an excess expenditure of Tk61.53 crore per year, had the rent been a more reasonable Tk100 per square foot.

Adding insult to injury, the bank reportedly paid nearly Tk27 crore over 42 months until August 2024 for two additional floors (the 20th and 21st) of Iqbal Tower that were non-existent, unfinished, and unusable. 

Despite field inspections revealing bare roofs without walls, electricity, or sanitary fittings, the bank continued to pay rent month after month, even with Bangladesh Bank's purported approval.

Beyond the excessive monthly payments, the bank also advanced nearly Tk220 crore in rent to Iqbal's entities, essentially using the bank's funds as a direct pipeline into his private property business. 

This substantial advance, significantly higher than the adjusted due advance of Tk159.32 crore as of December 2023, suggests a potential breach of contract or unadjusted previous advances.

Wasted funds and unaccountable subsidiaries

The questionable practices extended beyond the main headquarters. 

Premier Bank annually wastes Tk3.75 crore on a poorly utilised 25,000 square foot tin-roofed "central warehouse" in Tejgaon Industrial Area, rented from Vice Chairman Moin Iqbal (HBM Iqbal's son). 

The central bank's inspection found only a quarter of the space in use, despite the bank possessing land in Banani where it could have built its own cost-effective storage.

Furthermore, Premier Bank Securities Ltd (PBSL), a subsidiary, rents 10,400 square feet at Premier Square in Gulshan, owned by HBM Iqbal's wife. 

The inspection, however, found PBSL using only a fraction of this space (510 square feet), with the rest serving as the former chairman's private office, a hotel conference room, and a warehouse. 

Premier Bank also lent PBSL Tk230.20 crore, with Tk106.58 crore reportedly undisclosed in the bank's CL statement and an unusually low interest rate of just 5%.

Even the Premier Bank Foundation, meant for philanthropic activities, was allegedly misused. 

Despite regulations limiting donations to 1% of annual profit or Tk1 crore, Tk30 crore was donated in 2023 and another Tk5 crore in 2024 without board approval. 

This money was funnelled into institutions controlled by the Iqbal family, such as Royal University of Dhaka and Sheikh Hasina University of Science & Technology, effectively causing losses to depositors and shareholders.

Regulatory oversight and current status

According to a Bangladesh Bank official, banks require central bank approval to rent buildings from their directors or shareholders. 

"HBM Iqbal was influential under the previous government, and many approvals were granted under pressure," the official stated, adding that this irregularity was detected during a special inspection and legal action would follow.

Premier Bank's non-performing loans have skyrocketed. As of March 2025, NPLs stood at Tk9,817 crore, a staggering 29% of its total loan portfolio. This marks a sharp increase from December 2024, when NPLs were only Tk1,611 crore (4.9%). The bank also faces a provisioning shortfall of Tk7,016 crore.

HBM Iqbal and his son Moin Iqbal resigned from their posts on 12 January 2025, citing health reasons (for HBM Iqbal). Another son, Imran Iqbal, was appointed the new chairman. 

The Anti-Corruption Commission (ACC) has been investigating HBM Iqbal for alleged embezzlement and illegal wealth acquisition, and a court imposed a travel ban on him and his wife in October. 

Despite this, sources at Premier Bank indicate they are currently abroad. The bank accounts of HBM Iqbal, his wife, and their three children were frozen in November.

Repeated attempts to contact Premier Bank's Managing Director and current Chairman for comment were unsuccessful. This reporter's visit to the bank's headquarters on 23 July also yielded no responses from officials despite a two-hour wait.