Reza Mahmud :
Standard Bank’s Managing Director (MD) Md. Habibur Rahman has been accused of involvement in a major loan irregularity during his tenure as Additional Managing Director (AMD) at Union Bank.
According to a recent inspection report by Bangladesh Bank, he played a direct role in approving irregular loans worth around Tk 2,607 crore in favour of S. Alam Group while serving at Union Bank.
The Inspection Department-7 report shows that in the fiscal year 2021–22, Union Bank disbursed loans ranging from Tk 23 crore to Tk 148 crore to nearly 30 shell companies controlled by S. Alam Group, totaling Tk 2,607 crore.
Most of these loans have now turned classified (defaulted), and the majority of the companies do not exist in reality.
The report notes that the official approval notes bore Habibur Rahman’s signature, with the remark: “First and final approval from head office.”
Officials at Bangladesh Bank have stated that such approvals violate both the Bank Company Act and the bank’s internal credit policy, as a single individual’s involvement in proposal, evaluation, and approval represents a clear conflict of interest.
The scandal originated from S. Alam Group’s extensive influence over Union Bank. Several fictitious companies owned or controlled by the group received loans with the direct cooperation of the bank’s top management.
The inspection report also stated that a significant portion of the funds was transferred to other entities, with strong suspicion of foreign remittance or money laundering.
When contacted, Standard Bank’s Managing Director Md. Habibur Rahman on Thursday told The New Nation that, “I was Additional MD of Union Bank. So it was not my sole responsibility or power to allot loans on my own intention.” He said, “Some other officials of the bank signed the deals as well.
I also gave signatures on those loan approvals.” When contacted, Bangladesh Bank Assistant Spokesperson Mohammad Shahriar Siddiqui on Thursday told The New Nation, “If any banking sector official involved in corruption on allotting loans or such others it does not matter how old case is that. They will face legal actions.”
The BB official said, he will scrutinise the allegations of Md. Habibur Rahman.
According to Bangladesh Bank data, nearly 80pc of Union Bank’s deposits are now at risk due to these irregular loans, pushing the bank toward insolvency.
The allegations against Habibur Rahman are not limited to this recent episode.
According to Anti-Corruption Commission (ACC) records, he has been accused in multiple previous cases. In 2000, while serving in the Credit Department of Mercantile Bank, he allegedly concealed information about a defaulted loan of a company named “Patrick Fashions” and recommended a new loan of Tk 8 crore based on false information.
A case (No. 272/22) was filed against him on charges of fraud, collusion, and abuse of authority.
In 2024, after the charge sheet in that case was submitted, the High Court directed Bangladesh Bank to take action against him within 60 days (Writ No. 5217/2024).
Following that order, he was temporarily removed from his post as MD of Standard Bank. However, he was mysteriously reinstated shortly afterward, raising serious questions about the transparency of the regulatory decision-making process.
According to ACC sources, Habibur Rahman, along with two close associates — Standard Bank’s Head of HR Mansur Ahmed and Chief Financial Officer (CFO) Md. Salah Uddin — has recently been summoned for questioning in connection with Union Bank’s money laundering investigation.
Bangladesh Bank’s inspection report also lists these two officers as being involved in the irregular loan approvals.
Under Bangladesh Bank’s BRPD Circular Nos. 3 and 41, the CFO of a bank must be a qualified Chartered Accountant. However, current CFO Salah Uddin holds the position without the required qualification. Similarly, Chief Legal Officer Md. Akhtaruzzaman continues to hold office without 10 years of Supreme Court experience or Bar Council membership, which is a direct violation of recruitment policy.
Furthermore, BRPD Circular No. 5 (2024), Section 2(k)(8), states that any person named with negative findings in a central bank inspection report is ineligible to serve as MD or CEO of any other bank. Thus, Habibur Rahman’s reinstatement clearly contradicts this policy.
Banking sector experts believe that allowing such reinstatements and reappointments of officials named in serious inspection findings sends a grim signal for governance and accountability in the banking industry.
They said, “If the regulator itself maintains double standards in enforcing rules, public trust in the banking system will continue to erode.”
In conclusion, the Union Bank loan scandal is not just an isolated case of corruption within a single institution; it has exposed deep cracks in the discipline and transparency of Bangladesh’s banking system.
Economists and financial analysts have stressed that a swift and impartial investigation by Bangladesh Bank and the Anti-Corruption Commission are the only viable path to restoring confidence in the sector.
