S Alam Group alone has taken more than half of the total loans disbursed by Islami Bank, posing a significant recovery challenge, Md Obayed Ullah Al Masud, the bank’s newly appointed chairman, said on Thursday.
After meeting with Bangladesh Bank Governor Dr Ahsan H Mansur, Masud stated that Islami Bank’s total loan disbursement stands at around Tk 1.75 lakh crore, with S Alam Group taking more than half, or over Tk 87,500 crore.
However, Masud noted that this is not the final account, and a complete assessment will take another week.
"S Alam overvalued its assets to secure these loans, and we are now in the process of reassessing them. Additionally, collaterals held against these loans are insufficient to cover the outstanding amounts. We have written to the law ministry to identify assets outside of the current collaterals," the Islami Bank chairman said.
When the new board took charge, the bank was facing a liquidity shortage of Tk 2,300 crore, but this deficit is improving day by day, he further said.
"Since Thursday, the liquidity shortage has reduced to Tk 2,000 crore. We expect it to recover within the year," he added.
The largest private bank’s new chairman also assured depositors that they could withdraw any amount of money from the bank. "Customers will no longer face issues withdrawing funds after today, as withdrawal demands are now lower than the deposits made last week, resulting in a net balance," he explained.
When asked about actions against officials linked to S Alam, he said, "We are not considering action against lower-tier staff for now, as this could destabilise the situation. Some senior officials have already been removed, and more will follow gradually. Actions will be taken according to the rules, and no one will be exempted."
The new chairman of Islami Bank also talked about a roadmap for the bank’s recovery. "A roadmap has been drawn up to turn around the bank. The roadmap was made in three phases, with 2025-26 considered the turning point," he said.
“The first phase involves identifying issues and taking immediate steps since the new board’s tenure began. The second phase, from 2025-26, has been set as the turnaround period. The final phase, from 2027-29, will be the leap forward years,” he added.
