Customers of Islami Bank Bangladesh PLC have demanded the cancellation of all appointments made by the S Alam Group after 2017, publication of accurate information on the amount of money laundered by the group and immediate action to bring those responsible to justice.
They have also called for the removal of the current chairman of the bank’s board of directors and the reinstatement of the bank's founders to the board.
They made the demands at a meeting of customers organised by the “Customer Forum of Shariah-based Islamic Banking” at a hotel in Dhaka city on Saturday.
Speakers at the event said that a nationwide reform process has begun with the recent change in government, and as part of that, the financial sector is also undergoing reforms. The board of Islami Bank has already been restructured through the Bangladesh Bank. Now, it is essential to reveal the details of the chaos created by the S Alam Group at Islami Bank since 2017.
Customers from across the country expressed their views at the meeting. The welcome speech was delivered by Abdul Haque, former director of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), and the chief guest was economist Prof Abu Ahmed.
Ahmed said that a conspiracy has been at work to destroy the reputation of Islamic banking in Bangladesh. “S Alam Group targeted and took control of Islamic banks, leading to a situation where customers no longer want to open LCs or deposit money in Islami Bank.
“This is a significant conspiracy that has caused Islami Bank, which once lent to other banks, to now operate on loans itself,” he said, emphasising the need to restore the bank to its previous status and free from these conspiracies.
Ahmed urged the Bangladesh Bank (BB) governor to ensure that Islami Bank remains true to Islamic principles. Reorganising the Islami Bank without maintaining its Islamic essence would dissuade believers in Islamic banking from keeping their money there.
Dr Muhammad Abdul Majid, former chairman of the National Board of Revenue, pointed out that customers are the most significant strength of a bank. “Banks are formed with customers' money. When someone buys a few shares and claims ownership, irregularities begin. There was a time when Islami Bank customers could not get loans, but a particular group granted loans to whomever they pleased according to their whims.”
He further stated that customers lose trust if Islami Bank or any Shariah-based bank does not operate according to Shariah. He suggested the formation of a platform for customers of Shariah-based Islamic banks to prevent anyone from deceiving them with their money.
Majid mentioned that there have been multiple reports about the group that took control of Islami Bank. The court recommended an investigation based on one such report. “However, the same court later ruled that no investigation could be conducted, which was a one-sided decision that allowed corruption to flourish.”
Former FBCCI vice-president Abul Kasem Haider stated that S Alam illegally appointed many people under the pay-scale benefits of Islami Bank. These appointments should be cancelled immediately. “There was a time when businessmen across the country couldn’t open LCs, but S Alam Group could easily open LCs. It's time to investigate how this was possible.
On August 22, BB formed a new board at Islami Bank, free from the controversial control of S Alam Group. Five independent directors were appointed to the bank. Obayed Ullah Al Masud, who previously served as the managing director at Sonali and Rupali banks, was made the new chairman of the board.
Speakers at Saturday’s programme also noted that Islami Bank does not engage in interest-based business. However, the newly appointed chairman has previously served at several interest-based banks and has even been accused of providing undue benefits to S Alam Group during his tenure. Reappointing such a person as chairman of Islami Bank is illogical.
They stressed that in this situation, the board chairman should be replaced immediately and the individuals who originally helped establish Islami Bank should be brought back.
At the end of the discussion, the meeting organisers announced six resolutions, which will later be submitted to the BB governor and the financial adviser in the form of a memorandum.
These resolutions include restoring institutional discipline at all levels of Islami Bank's management, conducting a comprehensive investigation into the investments made by S Alam in the bank under both legitimate and illegitimate names, bringing them to book to ensure justice, and recovering the bank's due funds.
It also involves holding accountable the senior officials and others involved in illegal withdrawals and promptly removing them from the bank's board while reconstituting the board with founding members.
Additionally, they said, the bank's reputation should be restored to its pre-occupation status by including honest and competent individuals. Efforts should be made to ensure that skilled and well-invested customers can continue their business activities with proper investments as before, contributing more to the country's economy. Finally, the protection of depositors' interests and financial security should be ensured.
