IBBL: Board Members and Bank Officials Involved in Facilitating Lootings

For eight years leading up to the fall of the Awami League government, representatives from S Alam Group-owned companies held key positions as chairman and board members at Islami Bank Bangladesh Limited (IBBL). During this period, they approved loans amounting to over Tk 730 billion—half of the bank's total disbursement—enabling S Alam Group to misappropriate vast sums of money. High-ranking bank officials, including managing directors, actively supported the conglomerate in these fraudulent activities.

Independent directors also became implicated in irregularities. While a central bank observer was present, their actions raised concerns. The Anti-Corruption Commission (ACC) has since filed cases against several individuals, including former IBBL chairman and Saiful Alam’s son, Ahsanul Alam, as well as past directors, the current managing director, and other officials, accusing them of embezzling Tk 10.92 billion. However, many of those involved remain unaccounted for.

The extent of fraud at IBBL became public after the Awami League lost power on August 5, 2024. S Alam Group, which had close ties to former Prime Minister Sheikh Hasina, acquired half of the bank’s loans either in its name or anonymously following a 2017 ownership change, leading to a severe liquidity crisis. After the political shift, the central bank appointed independent directors to restore the bank's financial stability and attract foreign investors.

Key Figures and Changes in Leadership

On January 5, 2017, under special security arrangements, IBBL's leadership underwent a significant overhaul at a meeting held at Radisson Blu Hotel in Dhaka. The then-chairman, vice chairman, and managing director (MD) were forced to resign by an intelligence agency before the meeting. Arastu Khan, formerly of S Alam Group-owned Commerce Bank, became the new chairman, while Abdul Hamid Mia, then MD of Union Bank, assumed the role of MD. These changes were approved late at night by the Bangladesh Bank governor at the time, Fazle Kabir. Soon after, systematic looting of the bank began.

Arastu Khan resigned in April 2028 as irregularities surfaced. Dhaka University professor Nazmul Hasan, representing S Alam Group’s Armada Spinning Mill, took over as chairman, during which the most egregious frauds occurred. Between 2017 and August 2024, all nominated and independent directors were closely aligned with S Alam Group, including several influential figures such as S Alam’s son Ahsanul Alam, former army officers, academics, and high-ranking bank officials.

Corruption and Rewards

The board reportedly approved questionable loan proposals with minimal scrutiny. Officials from Chattogram, strategically promoted to key branches, facilitated these loans. S Alam Group’s personal secretary and IBBL Deputy Managing Director (DMD) Akij Uddin allegedly oversaw recruitment, while another DMD, Miftah Uddin, disbursed funds without resistance. Directors reportedly received inflated honoraria, and senior officials, including former MD Mahbub-Ul-Alam, were rewarded with luxury apartments in Gulshan’s “The Address” building. Many beneficiaries of these schemes avoided accountability, disappearing after the government changed.

ACC Investigation and Allegations

The ACC recently filed cases against 58 individuals, including former IBBL chairman Nazmul Hasan, ex-directors, and current and former high-ranking officials. The allegations involve embezzlement of Tk 10.92 billion through fraudulent loans. Attempts by Prothom Alo to contact the implicated individuals, including former chairman Nazmul Hasan, were unsuccessful. However, former director Joynal Abedin stated he was coerced into joining IBBL in 2017 and later removed from the executive committee for objecting to dubious loan approvals.

Extent of the Looting

Reports from the central bank and Bangladesh Financial Intelligence Unit reveal that S Alam Group directly borrowed Tk 561.18 billion, indirectly took Tk 75.24 billion, and used other entities to secure Tk 94.71 billion in loans. This amounts to 50% of IBBL’s total loans. Current IBBL chairman Md Obayed Ullah Al Masud confirmed these figures, noting efforts to reassess collateral and recover funds.

A State-Sponsored Scandal?

In an interview with the Financial Times, Bangladesh Bank governor Ahsan H. Mansur accused intelligence agencies of facilitating the hostile takeover of banks, describing it as the largest bank heist in history. According to him, Saiful Alam and his associates siphoned off at least $10 billion from the banking system, aided by state-sponsored pressure tactics. Loans were approved routinely, often without adequate scrutiny, enabling large-scale misappropriation.

Looking Ahead

Efforts are underway to address the crisis, but the scale of the fraud raises significant concerns about governance and accountability in Bangladesh’s banking sector. Many of those involved remain beyond the reach of the law, leaving questions about justice and recovery unanswered.