Bangladesh Bank (BB) has given three months' forced leave to six managing directors of as many banks, including Syed Waseque Md Ali of First Security Islami Bank, due to alleged negligence and irregularities associated with the S Alam Group.
The Shariah based banks are First Security Islami Bank, Exim Bank, Union Bank Limited, Global Islami Bank PLC, Social Islami Bank Limited and ICB Islami Bank Limited.
This decision, ratified during a recent taskforce review, underscores the central bank's commitment to enforcing accountability and enhancing good governance in banking sector.
To ensure a thorough evaluation during this period, Bangladesh Bank has engaged two prominent international audit firms-KPMG and Ernst & Young (EY)-to conduct an Asset Quality Review (AQR) of the banks.
Based in Amsterdam, the Netherlands, KPMG, acronym for Klynveld Peat Marwick Goerdeler, began functioning after 1987 merger.
Ernst & Young, better known as EY, was established in 1989 through the merger of Ernst & Whinney and Arthur Young & Co., with its headquarters in London, the United Kingdom.
The forced leave for Syed Waseque Md Ali, effective January 5, follows his alleged involvement in irregular loan disbursements to the S Alam Group during Awami League rule.
In his absence, Additional Managing Director Abu Reza Mohammad Yahia will serve as Acting MD. This action was prompted by findings of a special audit committee within the bank, which identified negligence in loan processing and recommended his temporary removal for a more in-depth investigation.
The Asset Quality Review (AQR) and forced leave was given to Managing Directors of five other banks over their questionable appointments during Awami League rule.
These measures, taken to restore confidence on banks generated mixed reactions.
Former Association of Bankers Bangladesh (ABB) Chairman Anis A Khan expressed reservations, suggesting that such action should ideally be preceded by internal audits to avoid prematurely tarnishing the careers of senior bankers and signaling instability within the sector.
As the AQR proceeds, stakeholders are keenly awaiting the outcomes of the internal audits and the assessments by KPMG and EY. Should negligence be confirmed, further disciplinary measures are anticipated. Bangladesh Bank's decisive actions highlight its dedication to governance reforms, emphasising the delicate balance required to maintain stability and trust on the banking industry.
