Our Correspondent
S Alam Group’s control over First Security Islami Bank Ltd (FSIBL) ended yesterday after Bangladesh Bank reconstituted the board of the Shariah-based bank, which was heavily dominated by individuals linked to the Chattogram-based conglomerate.
The central bank dissolved the previous 11-member board, of which Mohammad Saiful Alam, founder of S Alam Group, was chairman.
Alam’s wife Farzana Parveen and four other relatives were also on the board of the FSIBL, which the group established in 1999.
In their place, Bangladesh Bank formed a new five-member board with independent directors.
The FSIBL is the fifth bank to have its board restructured as Islami Bank, Social Islami Bank, Global Islami Bank and Union Bank underwent the same over the last couple of weeks.
The central bank appointed Abdul Mannan, who was forced to resign from the post of managing director of Islami Bank Bangladesh in 2017 at “gunpoint”, as chairman of the new board of the FSIBL.
The four new independent directors are Azizur Rahman, former executive director of the central bank, Md Abdul Kuddus, former deputy managing director of Uttara Bank, Md Saiful Alam, associate professor of accounting and information systems at the University of Dhaka, and Raghib Ahsan, a chartered accountant.
The new board was constituted as per section 45 of the Bank Company Act, 1991 to protect the interests of depositors and ensure good governance, the central bank said in a letter to the FSIBL’s managing director.
S Alam Group and its associated companies allegedly took out huge loans from the bank.
As of last December, the bank’s total outstanding loans stood at about Tk 56,917 crore, with Tk 2,142 crore of that amount being defaulted, as per central bank data.
However, the actual volume of defaulted loans is higher, according to industry people.
S Alam Group and its associated companies have left the bank with a deficit in its current account balance with the central bank for more than a year.
As of August 7, the bank faced a current account deficit of Tk 6,693 crore, central bank data showed.
