How BB weaponised transfers to punish certain officials

In May this year, Islami Bank applied to the Foreign Exchange Policy Department (FEPD) of Bangladesh Bank for approval to open four authorised dealer (AD) branches, just months before the fall of the Awami League government. In response, the department's then-additional director sent a letter to the bank, requesting the necessary documents for approval.

However, the bank, which was controlled by the S Alam Group, a close ally of the Awami League government, was reportedly dissatisfied with the request, and the officer who issued the letter was questioned by then-deputy governor Kazi Sayedur Rahman as to why the documents were sought.

"A few days later, I was transferred from the FEPD because of the letter I sent to Islami Bank," the additional director claimed.

Wishing not to be named, he told TBS that Islami Bank, under S Alam Group's control since 2017, was reportedly so privileged that even central bank officers felt they could not follow standard procedures while dealing with it.

Interestingly, deputy governor Kazi Sayedur Rahman, who was overseeing the FEPD at that time, was removed from the central bank soon after the fall of Sheikh Hasina's Awami League-led government on 5 August, suggesting his possible ties to the party.

The transferred additional director, who received the Bangladesh Bank Employee Recognition Award in 2014, is not the only official who faced such treatment for instructing banks controlled by close associates of the AL government to adhere to regulatory guidelines.

TBS spoke to at least 20 Bangladesh Bank officers, who stated that "transfer" was used as a punitive measure against those who dared to ask banks to follow regulations during the AL era.

Another officer told TBS that he was transferred immediately after imposing LC (Letter of Credit) restrictions on three branches of Janata Bank in 2022. While working in the Off-site Supervision Department, this officer discovered significant irregularities in LC transactions at the state-owned Janata Bank, which led to the restrictions.

The following day, Kazi Sayedur Rahman, who was then in charge of the central bank's Human Resource Department, summoned the officer and reportedly confined him in his office until he agreed to an immediate transfer to another department.

"I was asked which department I wanted to move to. I requested time to consult with my department head, but he told me I couldn't leave the room until I made a decision. It was mental torture," the officer recounted to TBS on condition of anonymity.

Many officials were transferred in this manner during the AL era, and this trend persists even after the government change in August.

Officials said this is due to key departments still being led by the same directors and executive directors appointed by the previous government, who held privileged positions.

For instance, a joint director from the Non-bank Financial Institution Inspection Department was transferred in October after raising concerns about irregularities involving defaulted borrowers of Bangladesh Infrastructure Finance Fund Limited (BIFFL).

Sharing his experience, he said, "The Bangladesh Bank has not changed the portfolios of executive directors who were privileged during the Hasina government. As a result, officials still face transfers if they take any initiative that goes against the interests of these people.

"I was verbally instructed by an executive director to provide undue facilities to Strategic Finance and Investment Limited, owned by Chowdhury Nafeez Sarafat, another AL ally and former chairman of Padma Bank. I refused, requesting a written order instead. My entire department backed me in protesting the executive director's verbal instruction, and as a result, the executive director was removed from the department."

Several central bank officials, on condition of anonymity, told TBS that the new governor, appointed by the interim government, should consider reshuffling the portfolios of certain directors and executive directors.

They also claimed that efficient officers, who were transferred as a form of punishment, have not been reinstated because the Human Resources Department is still led by Nurun Nahar, who was appointed by the previous government.

Another officer claimed that there was malpractice in the transfer process, where officers were instructed by the Human Resources Department to negotiate with directors willing to accept them in their departments.

This is due to some key departments being controlled by privileged directors who select only obedient officers to work under them. Transfers are being done based on loyalty to the department head rather than experience and efficiency.