Ex-Islami Bank MD Mannan 'was forced to resign'

Former managing director of Islami Bank Bangladesh Abdul Mannan has alleged that he was forced to quit the job at the Shariah-based bank at gunpoint after he was taken hostage by members of an intelligence agency in 2017 when S Alam Group took control of the bank.

"I was forced to resign on a pad that Islami Bank never used since its inception in 1983 till date," he said at a virtual discussion on Friday (August 30).

The Forum for Bangladesh Studies organised the discussion on "Elimination of Occupancy in the Banking Sector: Will the Plight End?"

Mannan alleged that the day he was forced to resign, many top officials of the central bank had stayed in their offices until late at night to accept his resignation.

Bangladeshi media outlets kept mum on the forcible occupation of the country’s one of the best private banks. British weekly The Economist, however, covered the March, 2017 incident.

After taking control of the bank, Chattogram-based S Alam Group, owned by Mohammad Saiful Alam, and its associated companies took loans of Tk 74,900 crore from Islami Bank, which is 47 percent of the bank’s total outstanding loans as of March this year, documents of the bank show.

Speaking at the event, economists and experts urged the interim government and the Bangladesh Bank to take immediate steps to bring the ownership of the banks back to the depositors to save the financial sector from further deterioration.

Badiul Alam Majumdar, Secretary of Shushashoner Jonno Nagorik (Shujan), said corruption in banking and other sectors is rooted in the petty politics of the country.

He suggested reforms in the political culture to get out of the situation.

Rashed Al Mahmud Titumir, professor of Development Studies at Dhaka University, said depositors are the real owners of banks, but sadly the top executives of banks are considered the owners.

"Unfortunately, there are no banking laws in the country that recognise depositors as owners," he said.

Mamun Rashid, Chairman of Financial Excellence Ltd, said S Alam took over six banks though the banking law states that more than 10 percent of a bank's shares cannot be given to any person or entity. “It was irresponsible on the part of the central bank.”

According to documents, S Alam's ownership share in Islami Bank is about Tk 1,800 crore. As a single beneficiary, the group withdrew about Tk 50,000 crore from the bank when the bank had deposits of Tk 160,000 crore.

"Now the question from all quarters is, how did S Alam come into picture? Islami Bank's managing director and board members were taken to a five-star hotel where they were forced to resign and a new managing director was appointed overnight at supersonic speed. This was the S Alam method of becoming the owner of one bank after another," Mamun said.

He said the central bank calculated the bad loans amounting to Tk 182,000 crore, but it has given an estimate of Tk 377,000 crore as soured loans to the International Monetary Fund.

The amount is about 20 percent of the total disbursed loans of the banks.

Journalist Monir Haider moderated the event where Mizanur Rahman, economist, columnist and an adjunct professor of Manarat International University also spoke.