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Much-talked-about conglomerate S Alam Group has taken nearly Tk 70 billion in loans from Social Islami Bank, according to the new management of the bank now trying for a turnaround.
"These loans covering both funded and non-funded are still in regular status," says newly appointed Chairman of the bank Professor M. Sadiqul Islam.
Dr Islam made the disclosure while replying to a query about S Alam's total loans in the bank at a press briefing on Monday, the day when the interim government imposed travel bans on S Alam and family members in latest action.
Senior officials of the Shariah-based bank are now trying to contact the S Alam Group's Khatungonj office in Chattogram for recovering these loans.
"S Alam Group's Khatungonj office has already committed to paying back some money by the end of October," Mohammad Forkanullah, Managing Director (acting), told the reporters.
The bank officials alleged that the Chattogram-based conglomerate had taken control of the bank in 2017 after taking the then board of directors hostage at gunpoint.
Since then, the group and its associates, with support from the recently ousted Awami League government, had embezzled thousands of crores from the bank's stakeholders and laundered the money abroad, industry insiders alleged.
Social Islami Bank has faced a cash reserve requirement (CRR) shortfall since November 2022 mainly due to higher investment than deposits, according to the bank officials.
But the central bank took action against the bank on August 19, 2024 after nearly two years of the CRR shortfall, imposing some restrictions, including on opening fresh letters of credit, they added.
On the other hand, the reconstituted board of the Shariah-based bank is now working to improve their financial health by intensifying recovery efforts and strengthening deposit mobilization.
"We have already been able to recover cash amounting to nearly Tk 8.0 billion from August 05 to September 30," the bank's chairman said, adding that they are now identifying wilful defaulters and taking necessary actions against them.
Besides, Social Islami Bank has already got a commitment worth Tk 9.0 billion from four commercial banks under the central bank guarantee scheme, of which Tk 4.50 billion has already been deposited with the Social Islam Bank account.
"We've received commitment from more banks for getting deposits," the bank chairman noted.
Meanwhile, five commercial banks, including Social Islami, have already obtained a central bank guarantee to avail liquidity support from the interbank money market.
The chairman assured depositors that their deposits are safe and well-protected, saying that the bank will provide the best services, "driven by your trust and support".
"We've been able to start normal banking activities from last week. And the bank will return to its previous position soon," the acting MD said.
Among others, Nazmus Saadat, senior executive vice president of the bank, spoke on the occasion at its headquarters in the capital, Dhaka.
Founded in 1995, Social Islami Bank introduced a three-tier banking model (formal, non-formal & voluntary) for the first time in Bangladesh aiming to bring fresh dynamism in welfare banking targeting eradication of poverty with a motto of 'Working Together for a Caring Society'.