United News of Bangladesh

The Ministry of Finance has accepted Sonali Bank Chairman Ziaul Hasan Siddiqui's resignation and cancelled the appointments of Grameen Bank Chairman AKM Saiful Majid and the Chairman of Palli Sanchay Bank Akram Al Hossain and Managing Director (MD) Sheikh Md. Jaminur Rahman. The Financial Institutions Division of the Ministry of Finance issued four separate notifications in this regard on Tuesday. Sonali Bank Chairman Ziaul Hasan Siddiqui resigned on Monday. Ziaul Hasan Siddiqui was appointed as the first chairman of Sonali Bank in 2019. He was reappointed in August 2022. He was the Deputy Governor of Bangladesh Bank from 2006 to 2011. In between, he was an advisor to the Beximco Group. Meanwhile, the FID canceled the employment contract of Grameen Bank Chairman AKM Saiful Majid. He is a teacher at the Institute of Business Administration (IBA) of Dhaka University. He was first appointed to this position on March 16, 2020, by the government. After being appointed for two years, he was reappointed two more times for two years. The FID reappointed him last April. Apart from this, the appointment of Akram Al Hussain, Chairman of Palli Sanchay Bank has also been cancelled. In the bank, government-nominated director Mohammad Mohiuddin has been asked to perform the duties of the chairman. The managing director of the bank Sheikh Md. Md. Jaminur Rahman was also canceled. The FID issued separate notifications regarding the cancellation of their appointments.

The rot in the banking sector started in 2017, when Bangladesh Bank (BB) allowed a large industrial group to fully control a large private bank in the country., according to  the Association of Bankers, Bangladesh (ABB) Chairman and Managing Director of BRAC Bank Selim RF Hussain. The leading banker said this to journalists through a virtual platform on Tuesday. The situation was not that bad before. Basically, the central bank itself has gone on the path of compromise to give benefits to Chattogram-based special groups, he opined. Although he didn't mention them by name, it is understood he was talking about the Chattogram-based S Alam Group's takeover of Islami Bank. In 2017, the Awami League government took the initiative to make Islami Bank 'Jamaat-e-Islami free' as a political decision. The S Alam Group, close to the outgoing Awami League government, then took control of the bank's ownership and management using a Defense Intelligence Agency. Now one-third of the bank's loans are owned by the group interests, said the chairman of the ABB, an association of bank owners and managing directors. Asked what kind of measures should be taken in the case of the Shariah-based banks faced with liquidity crisis, Hussain said in response, "As far as I understand, initially the chairman and board of these banks will be restructured to stabilize the banks. Already their creditworthiness has been reduced." He said that when the problem first arose in these banks, it was necessary to identify it quickly and bring it under restrictions. The central bank did not do that and kept them alive with money supply, the country has suffered a great loss. Now the responsibility of coming out of this difficult situation has fallen on the shoulders of the new government, he said. Journalists wanted to know what would be the effect if the banks are closed. ABB chairman said, “In Bangladesh, it was said that no bank was allowed to close. But in a market economy, if a bank goes bad, it should be allowed to close. Many banks have been mismanaged in the last 10 years. By letting them die naturally, people would know where to put their money safely.” He also said there are systemic problems in the country's banking sector. About 70 percent of the parliamentarians of the previous government were associated with business groups. As a result, they made all laws in their favour. Citing a former governor, Hussain said, “The entrepreneurs of the banking sector in the country are big businessmen. This (their involvement in politics as MPs) creates a major conflict of interest. These must be stopped now.”

Bangladesh Financial Intelligence Unit (BFIU) has ordered the freezing of bank accounts linked to several prominent individuals, including former State Minister for Power, Energy and Mineral Resources Nasrul Hamid and former Dhaka Metropolitan Police Joint Commissioner Biplob Kumar Sarkar. The action comes as part of an investigation into alleged money laundering and other financial irregularities. The freeze also extends to the bank accounts of Nasrul Hamid's family members, including his wife, Sima Hamid, son Zareef Hamid, and daughter Alifa Hamid. Similarly, the accounts of Biplob Kumar Sarkar’s wife have been seized. Former Chairman of the Bangladesh Security and Exchange Commission (BSEC), Prof. Shibli Rubayat Ul Islam, and his son Zuhair Sarar Islam are also among those affected. Additionally, the bank accounts of Sayedur Rahman, former president of the Bangladesh Merchant Bankers Association (BMBA), have been frozen. The crackdown further targets five individuals implicated in a share market scam, including Abul Khair, Javed A Matin, and Moniza Choudhury of asset management company CWT. This freeze covers both personal and business accounts, halting all transactions for the next 30 days, with the possibility of extending the suspension if required. The BFIU issued these directives on Tuesday, instructing banks and financial institutions to enforce the suspensions immediately.

Bangladesh Bank (BB) will not provide illegal liquidity support or any other facilities to any bank, including Sharia-based Islami banks. Governor Ahsan H. Mansur said this while speaking at a press conference at the boardroom of the central bank on Tuesday (August 20) on the latest situation in the banking sector. “Now if the depositors withdraw money from the bank occupied by S Alam, which is the result of their deeds. We have nothing to do. Because the depositors have the right to decide where to put their money,” he pointed out. The governor hoped that inflation would come down within 6/7 months. Monetary policy will not change much but will be tightened a bit. The currency market is going well now. The exchange rate of the US dollar went to Tk125 but now it has come down to Tk120/121 in kerb (open) market. Will action be taken against the irregularities in the banking sector? In a reply to such a query, the governor said that action would be taken against the irregularities of persons involved, but not against their institutions. Because there are many employment issues involved. Regarding taking over S Alam-owned banks and dissolving the board of other weak banks, Mansur said, taking action against weak banks or dissolving their board is under consideration. However, no decision will be taken hastily. Regarding non-performing loans, the governor said, “We want to go to international standards regarding NPL (non-performing loan). Traders have asked for some time to do this as export-import would be affected by this. The BB will discuss it with the IMF, but there is no doubt that we will go to action for NPL in with the international standards.” Regarding the instability of the government banks, the governor said that the instability of the state-owned Sonali and Palli Sanchay Banks is unfortunate. In response to a question, the governor said that the central bank has no decision to cancel Tk 1000 notes. Will Bangabandhu's picture removed and the note signed by the new governor come soon? In response to this question, Mansur said that when it is necessary to make notes in the mint, the notes will be printed and signed.

Finance Adviser Dr. Salehuddin Ahmed on Monday requested budgetary support from Japan during a meeting with Japanese Ambassador IWAMA Kiminori. The meeting, held at the Secretariat, underscored the longstanding partnership between Bangladesh and Japan, with a focus on expanding financial collaboration. “Japan has been a significant development partner for Bangladesh, primarily providing project support. This time, we sought budgetary support, and Japan has shown a positive attitude in this regard,” Dr. Salehuddin told reporters following the meeting. Employment generation takes priority over GDP growth: Planning Adviser Wahiduddin The Finance Adviser also expressed his condolences over the deaths of Japanese nationals in the 2016 Holey Artisan attack, acknowledging the deep ties between the two nations. Dr. Salehuddin emphasized the importance of continuing Japan-financed development projects in Bangladesh and discussed potential bilateral trade agreements aimed at boosting trade and commerce between the countries. He also requested an increase in scholarships for Bangladeshi students studying in Japan. Abdul Muyeed returning to Biman after 3 decades as Chairman In response, the Japanese Ambassador welcomed the new government, expressing confidence in its leadership capabilities. The ambassador also highlighted the need for Bangladesh to improve its business environment and implement reforms in the National Board of Revenue (NBR), as well as in various agencies, including the banking sector.

The Bangladesh Financial Intelligence Unit (BFIU) on Monday asked banks to freeze the accounts of Zahid Maleque, former health minister, and Mohammad Ali Sikdar, chairman of Computer World BD, along with their family members. Other persons are Zahid Maleque's son Ahad Maleque, daughter Sinthia Maleque, and Liakat Ali Sikder's wife Mahmuda Ali Sikdar. Besides, the BFIU also asked to freeze the bank accounts of Computer World BD. Mahmuda Ali Sikdar is also the company's chief executive officer. According to a circular from the agency, the BFIU has asked to freeze the bank accounts for the next 30 days in the initial phase. Sources said that the instruction came after the BFIU received reports of suspicious transactions in accounts under their names.  

Islami Bank Bangladesh Plc has dismissed the top eight officials including 6 Deputy Managing Directors (DMDs) for aiding S Alam Group in looting money from the bank. The dismissed officials are Additional Managing Director JQM Habibullah, Deputy Managing Director (DMD) Md. Akij Uddin, Mohammad Sabbir, Miftah Uddin, Md. Rezaul Karim, Dr. Md. Abdullah Al Mamun, and Camelco Taher Ahmed Chowdhury. In addition, IBTRA Principal Nazrul Islam has been dismissed. Islami Bank issued letters regarding dismissal and sent the letter to the officials on Monday (August 19).    

Bangladesh Bank (BB) has imposed limits on the disbursement of loans for six banks owned by the controversial S Alam Group for restructuring these banks. From now on these banks cannot disburse loans of more than Tk5.0 crore without the permission of the central bank. Institutions that have overdue and overdue loans cannot be renewed without cash collection. Executive Director and Spokesperson of BB Md Mezbaul Haque confirmed this information to UNB. He said, that from today, these six banks’ loan disbursement and LC opening will be stopped for an indefinite period. On Monday the BB sent letters to six banks informing them of this decision. The six banks are Islami Bank, Social Islami Bank, First Security Islami Bank, Union Bank, Global Islami Bank, and Bangladesh Commerce Bank. Earlier, the same limit was fixed for the private sector National Bank. The central bank imposed this limit at a time when these 6 banks were almost liquidity empty due to S Alam Group’s abuse of its loan ability. Former BB Governor Abdur Rouf Talukder went into hiding after the fall of the Awami League government on August 5. At that time, the central bank gave liquidity support by printing currency around Tk35,000 crore to these 6 banks. The S Alam group also looted this money disguised as a loan. The interim government appointed economist Ahsan H Mansur as governor last Wednesday (August 14). After that, the new governor decided to save the 6 banks. In the letter, BB said that this measure has been taken to prevent deterioration of the overall financial condition of the banks and to protect the interests of the depositors. The central bank directives also stated that no credit facilities other than agricultural investment, working capital, and loan to CMSME sector, loans given under incentive package, loan facility against fixed deposits kept in own bank and loans against 100 percent cash margin and other indirect loan facilities can be given. If these loans and loan facilities are more than Tk 5.0 crore, the prior approval of BB should be taken. Expired/Limited outstanding loan status no customer's existing loan facility can be renewed/extended without cash collection. Existing investments of other banks or financial institutions cannot be acquired. Apart from this, every bank has to submit the debt collection data of the top 20 borrowers monthly, according to the BB instructions. An official of the Banking Regulations and Policy Department of BB said that these banks are being planned to be restructured. This decision has been taken as its initial step. Through this, anonymous loan distribution has been prevented.

Abdul Muyeed Chowdhury, a former adviser to the caretaker government, has been appointed as the new chairman of Biman Bangladesh Airlines. The Ministry of Civil Aviation and Tourism announced the appointment through a notification issued on Sunday. The appointment was confirmed in a press release signed by Boshra Islam, General Manager of Public Relations at Biman Bangladesh Airlines. Abdul Muyeed brings a wealth of experience to the role, having previously served as the Managing Director and CEO of Biman Bangladesh Airlines from 1991 to 1994. His return to the national carrier marks a significant leadership change aimed at steering Biman towards new heights.

To stabilize the financial sector and tackle soaring inflation, Bangladesh’s interim government has decided on a series of critical reforms, including the formation of a banking commission. These decisions were made during a high-level meeting between Bangladesh Bank Governor Ahsan H. Mansur and Chief Adviser Professor Dr. Muhammad Yunus on Sunday, according to a press release from the Chief Adviser's office. One of the key outcomes of the meeting was the establishment of a banking commission dedicated to implementing sustainable reforms within the banking sector. Additionally, the government plans to release a comprehensive blueprint addressing the overall state of the financial sector within 100 days of its formation. The meeting also decided on adjustments to the foreign exchange market. The existing band for interbank foreign exchange transactions was expanded from 1.0 percent to 2.5 percent, a move aimed at increasing market liquidity. Under the crawling peg system, the exchange rate of the US dollar, currently set at Tk 117, may rise to Tk 118. Officials are hopeful that these measures will quickly restore liquidity and boost the volume of exchanges in the interbank market. Addressing the ongoing inflation crisis, the meeting emphasized the importance of managing demand and supply effectively. The government plans to maintain a contractionary monetary policy while simultaneously improving the supply situation. “Appropriate action has been taken to reduce inflation, so everyone should be patient for some more time to get relief from the pressure of inflation,” Bangladesh Bank Governor Ahsan H. Mansur told UNB. The urgency of these reforms is underscored by recent data from the Bangladesh Bureau of Statistics (BBS), which revealed that overall inflation surged to 11.66 percent in July, up from 9.72 percent in June. Food inflation, in particular, reached a 13-year high of over 14 percent, the highest since April 2011 when it peaked at 14.36 percent. The need for banking sector reforms was a focal point of the discussions between the Chief Adviser and the central bank Governor. The formation of the banking commission is seen as a crucial step towards addressing the sector’s current challenges and ensuring long-term stability.