BB appoints observers at IBBL, FSIBL

Staff Reporter :
Bangladesh Bank on Monday appointed observers at Islami Bank Bangladesh Limited (BBL) and First Security Islami Bank Limited (FSIBL) amid reports of massive loan irregularities in these two Shariah-based private banks.
The central bank spokesperson Mezbaul Haque and executive director Mezbaul Haque confirmed the matter to The New Nation.
Bangladesh Bank directors Abul Kalam Azad and Motasem Billah will work as observers at the IBBL and the FSIBL respectively, he said.
 “The observers will be on the board and look into the proceedings of the banks. If they find any irregularity, they will give an observation to the chairman of the board and also notify the central bank,” he added.
The central bank usually appoints its high officials as observers at a bank when its financial health deteriorates due to loan scams. It has so far appointed observers at nine banks, including the latest two.
 Bangladesh Bank (BB) had appointed an observer to IBBL in December 2010, following allegation of loan irregularities.
Since then, a director level official (then general manager) of the central bank used to attend different meetings of the Shariah-based bank.
In March 2020, the central bank withdrew the observer from the bank.
On December 4, the High Court directed the authorities to probe the alleged loan scams at the IBBL, Social Islami Bank Ltd, and FSIBL. The Anti-Corruption Commission, the Bangladesh Bank, the Bangladesh Financial Intelligence Unit, and the Criminal Investigation Department of Police have been asked to submit probe reports to the court by April 5.
If the allegations of loan scams are found to be true in the probes, the ACC, the BB, the BFIU, and the CID will have to inform the court about the actions taken against the persons involved in the scams.