Islami Bank seeks Tk10,000cr recovery from five shariah-based banks

Islami Bank Bangladesh Limited has sought the recovery of nearly Tk10,000 crore owed by five Shariah-based banks, raising the issue during a meeting with Bangladesh Bank Governor Mostaqur Rahman on Tuesday (31 March).

The meeting was held at the central bank's headquarters at 11:30am, where the governor met the bank's board. It was attended by the bank's chairman, board members, the managing director and other senior officials.

According to sources, Islami Bank Bangladesh Chairman M Zubaidur Rahman urged the prompt recovery of outstanding dues during the discussion.

Sources said Islami Bank also has dues pending from state-owned Janata Bank Limited. In addition, the bank informed the central bank that around Tk1,000 crore in remittance incentives remains pending and requested the release of the funds from Bangladesh Bank.

The lender also sought regulatory support in recovering large loans, relaxation in provisioning requirements under special circumstances, and guidance on maintaining relations with major industrial groups.

In response, Moshtaqur assured the board that the issues would be examined seriously and that decisions on support would be communicated soon, while also pledging full support for smooth operations.

A senior Bangladesh Bank official told The Business Standard that the governor also asked about the bank's operational challenges and instructed relevant departments to review the matters.

The discussion comes as Islami Bank continues efforts to recover from a prolonged governance crisis.

On 17 February, Bangladesh Bank removed board member Md Abdul Jalil and appointed accountant SM Abdul Hamid in his place.

From 2017 until August 2024, before the fall of the Awami League government, the bank was effectively controlled by the S Alam Group.

During that period, nearly Tk1.2 lakh crore was withdrawn under various names and roughly 10,000 officials were irregularly appointed, pushing the bank into a deep crisis.

After the interim government assumed office in 2024, the bank's board was restructured, with several senior officials leaving the country. Md Abdul Jalil was later appointed to the reconstituted board.

Tuesday's meeting marked Governor Moshtaqur's second discussion with the board.

During the first meeting, he noted that Islami Bank had once been a strong institution but had suffered governance lapses in recent years. He also assured full support from the central bank to restore stability, stressing that the bank must not serve the interests of any single group, political party or family.

Meanwhile, A report submitted by Bangladesh Bank to the Anti-Corruption Commission alleged that the S Alam Group had taken nearly Tk1.9 lakh crore in loans from four of the eight banks it controlled.

Of that amount, Islami Bank alone accounted for about Tk1.05 lakh crore.

The Bangladesh Financial Intelligence Unit reported that more than Tk93,000 crore was laundered through fraudulent companies.

According to the findings, Saiful Alam Masud, head of the S Alam Group, and related entities used their influence to secure the loans either directly or through intermediaries.