Islami Bank dismisses 200 employees, makes 4,771 OSD over competency test boycott

Islami Bank Bangladesh has dismissed 200 employees and made 4,771 others "officer on special duty" (OSD) after they refused to take part in a newly introduced "special competency assessment" exam.

According to senior officials, the bank initially placed 4,971 employees on OSD status for skipping the test. From that group, 200 were later dismissed on allegations of violating service rules. Those made OSD will continue to receive their salaries and allowances; however, have no responsibilities or active duties.

The special competency assessment was held on 27 September under the supervision of Dhaka University's Institute of Business Administration (IBA). Out of 5,385 employees instructed to attend, only 414 sat for the exam. The majority boycotted it, despite instructions from management.

Bank insiders say most of those affected were recruited between 2017 and August 2024, during the period when S Alam Group exercised control over Islami Bank. Many of them are from Chattogram, particularly Patiya upazila—home to S Alam's business stronghold. 

Recruitment during that period reportedly took place without open circulars or competitive exams. Instead, job applications were collected through drop boxes at S Alam's residence and offices in Chattogram.

A written statement from the bank said over 7,200 individuals from Chattogram were recruited during that time, with more than 4,500 from Patiya alone. It also noted that around 2,500 employees had submitted certificates from BGC Trust University, Port City International University, and Southern University — institutions whose degrees the bank later struggled to verify. In several cases, fake certificates were detected, and actions have already been taken against those employees.

Earlier, on 29 August, the bank announced preparations for the competency test, prompting a group of employees to file a writ petition at court on 27 August seeking its cancellation. The court later tasked the Bangladesh Bank with issuing directives. 

In response, the central bank clarified that recruitment, retention, and assessment of employees are matters within Islami Bank's own jurisdiction.

Following that instruction, the exam date was fixed for 27 September. Bank officials said it was necessary to ensure accountability after widespread allegations of irregular recruitment under S Alam's control.

Bangladesh Bank Executive Director and Spokesperson Arief Hossain Khan told The Business Standard that while the regulator has no role in the matter, questions may arise in court over both why the bank recruited without competitive exams in the past, and why it is now terminating staff through an assessment process.

On 5 August, following the fall of the Awami League government during the student-people uprising, the Bangladesh Bank dissolved S Alam's influence over Islami Bank and appointed a new board. The new management then initiated a special competency test covering officers from senior officers down to assistant officers (cash).

Internal sources allege that S Alam Group siphoned off nearly Tk1.31 lakh crore from Islami Bank through various schemes and proxies, leaving the lender in a deep financial crisis. The latest staffing shake-up is seen as part of broader efforts to restore credibility and stability to the country's largest Shariah-based bank.