On the 5th of January military intelligence operatives phoned the chairman, a vice-chairman and the managing director of Islami Bank Bangladesh and brought them to the agency’s headquarters in Dhaka. A few hours later the bank’s board selected their replacements. Islami Bank has been of interest to the government for its association with the Jamaat-e-Islami, Bangladesh’s biggest Islamist party. In recent months, companies with ties to S Alam Group have built stakes in the bank, although the group denies any role in this. The new chairman, Arastoo Khan, declined to comment on the changes at the bank. The shareholders from Saudi Arabia and Kuwait were kept in the dark about the boardroom coup and complained bitterly about it. The Islamic Development Bank (IDB) questioned the rationale behind the changes and pointed out that there was no proper recruitment process. The Bangladeshi government has assured foreign shareholders that it will not let politicians loot the bank.
According to Bangladesh Bank's former deputy governor Khondkar Ibrahim Khaled, Islami Bank Bangladesh speaks about Islamic banking, but it does not act in that way. In his view, the private bank is not following Islamic banking rules of keeping customers as partners of profit or loss. He also alleges that remittances are dropping due to 'dishonest' mobile banking abroad. The statements were made at a seminar in Dhaka where several professors of Bangladesh Institute of Bank Management (BIBM) were present. Khaled said that remittances were dropping because money is being sent through illegal channels in the name of bKash. He advised the Bangladesh Bank to open a new wing to research mobile banking in order to stop transactions outside banking channels. In a research paper published at the seminar, it was said that a large section of the customers of Bangladesh's banks did not have clear ideas about the sector.
Islami Bank Bangladesh has undergone abrupt, major changes in its three top positions - chairman, vice chairman and managing director. Arastoo Khan, the former chairman of Commerce Bank has now become chairman of Islami Bank, replacing incumbent Mustafa Anowar. As a representative of Ibn Sina run by Bangladesh Jamaat-e-Islami leaders, Mustafa Anowar was serving as the chairman of the bank. He also resigned from the post of director as well as from the post in the bank’s foundation. The board of directors also replaced the bank’s managing director (MD) Mohammad Abdul Mannan by Union Bank’s MD Abdul Hamid Mia. Islami Bank Bangladesh has 307 branches including 57 AD branches and three offshore banking units as well as 13,229 staff members, as of December 2015.
Islami Bank Bangladesh Limited had five independent directors, of whom four have been dismissed in the last few months. These men are: NRM Borhan Uddin, AKM Sadrul Islam, Md Belayet Hossain and Md Abdus Salam. The bank’s board of directors refrained from renewing the tenures of these four because of government directives. Banking industry analysts believe the government’s directive is part of its plan to appoint four directors of its own choice. They believe the government is taking control of Islami Bank through several major changes including the board of directors. Last week freedom fighter engineer Mostafa Anwar replaced Abu Nasser Muhammad Abduz Zaher as the chairman.
The Anti Corruption Commission (ACC) on Wednesday interrogated director of Islami Bank Bangladesh Limited and its audit committee chairman ANM Burhan Uddin in connection with a graft allegation. ACC deputy director Shamsul Alam questioned him for two hours from 11 am at the ACC head office in the capital, ACC Public Relations officer Pranab Kumar Bhattacharya said. According to the allegation received by the national graft watchdog, Burhan Uddin influenced the bank management in hiring a deputy general director by concealing information, and also misused his power in resolving audit objections of the bank for his personal interest, according to UNB.
Islami Bank Bangladesh, the financier of Swan Garments over the last 30 years, plans to donate Tk 1.39 crore to clear the workers' one-month salary, the bank's Managing Director Mohammad Abdul Mannan said. Mannan hopes the bank's Board of Directors will agree to give away the fund as a lifeline to the company. The bank cannot invest further in Swan Garments, which has 1,300 workers in two units, as the company does not have any legal owner now, he said. Islami Bank will need the central bank's permission to further bankroll the factory, the loans of which have already been classified, Mannan said. Disputes over Swan's ownership need to be settled first to resume its operations, he said.
The Department of Inspection for Factories and Establishments (DIFE) yesterday requested Islami Bank Bangladesh, the financier of Swan Garments, to further lend Tk 1.39 crore to the apparel maker so that it can clear one month's salaries of its workers. Both the DIFE and the bank had been in trouble finding a successor of the company after the death of its Chinese owner, Ming Yuen Hon (Toby), in April. Disputes over the ownership have to be settled to resume operations of Swan Garments, and if Islami Bank wants to continue financing, it will need permission from the central bank as the company's loans have already been classified.
Islami Bank Bangladesh has moved 16 notches up to rank 954th in 2015 among the top 1,000 banks of the world by The Banker magazine of the UK. The bank ranked 970th in 2014 and 1,000th in 2012, the bank said in a statement. Besides, the bank has been ranked 70th, 250th, 791st and 785th considering return on capital, return on assets, capital assets ratio and amount of assets of the bank respectively, according to the statement. The Banker conducts a rating of the top 1,000 global banks since 1790. The magazine publishes the list in July every year on the basis of data and evaluation of more than 5,000 leading banks from 163 countries.
Mustafa Anwar has been elected chairman of Islami Bank Bangladesh, while Yousif Abdullah Al-Rajhi and NRM Borhan Uddin have been elected vice-chairmen. Anwar, who is the chairman and managing director of Birds Group, started his career as an engineer of Bangladesh Water Development Board after completing his graduation in civil engineering from Bangladesh University of Engineering and Technology in 1964. Rajhi is the general manager-cum chief executive officer of Al-Rajhi Company for Industry and Trade, KSA. Borhan Uddin, who is currently chairman of audit committee of the bank, is the vice-chancellor of City University, Dhaka.
In an attempt to check financing of militancy, the government will investigate how Islamic banks, including Islami Bank Bangladesh, and other financial institutions have spent their profits till date, said State Minister for Home Affairs Asaduzzaman Khan yesterday. Intelligence personnel have been instructed to check whether there are any inconsistencies in the financial statements of the institutions, the minister added. Intelligence personnel will also intensify their vigilance in Chittagong Hill Tracts, as some NGOs in the name of Islam are carrying out suspicious activities there. The national committee will also launch a campaign against militancy involving eminent media personalities, said Asaduzzaman, adding that the government would intensify its monitoring on social media like Facebook.
Banks in the United Kingdom and the United States are not accepting transactions made through the Islami Bank Bangladesh Limited after allegations surfaced about its alleged funding of militant groups across the globe. The matter came to light when a team of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) met the central bank Governor. According to BGMEA, banks in the United Kingdom and the United States are not accepting export bills and documents through the Islami Bank Bangladesh. Apparel sector’s apex body has requested Bangladesh Bank Governor Atiur Rahman to resolve the issue, saying many of its members were facing troubles. The bank posted a clarification on its website and denied the charges.
The Dhaka Stock Exchange (DSE) is planning to introduce an 'Islamic Shariah Index' to increase investment of Islamic Shariah-based banks in the stock market. A meeting was held with the representatives of Islami Bank Bangladesh in order to prepare a guideline for its introduction. According to DSE president and coordinator of the Stock Market Coordination Committee Rakibur Rahman, the DSE is also talking with the Standard and Poor's (S&P) for introduction of the new index.