Bangladesh Bank (BB) has clarified the issue amid ongoing discussion and criticism over allegations that newly appointed Islami Bank Chairman Md Khurshid Alam is a loan defaulter. The central bank said Khurshid Alam himself is not a defaulter; rather, a loan taken by a company jointly owned by his wife has fallen into default.
Speaking to reporters on Tuesday (June 2), Bangladesh Bank Executive Director and spokesperson Arif Hossain Khan said an investigation found that Khurshid Alam's wife is a joint owner of a company that obtained a Tk 30 million loan from First Security Islami Bank. The loan later became classified as defaulted. Therefore, he said, it is incorrect to describe Khurshid Alam as a defaulter. While the company in which his wife has ownership is in default, Alam is not personally a loan defaulter.
Another long-standing allegation involving Khurshid Alam has also resurfaced recently. He was accused of misappropriating Tk 5.4 million while serving as General Manager of Bangladesh Bank's Rangpur office. Following an investigation, Bangladesh Bank's Human Resources Department issued an office order on February 11, 2018.
According to the order, allegations brought against him on April 3, 2017, were found to be proven. As a result, two of his annual salary increments were withheld under Section 44(1)(b) of the Bangladesh Bank Staff Regulations, 2003.
However, eight years later, the central bank has taken a different position on the matter. Arif Hossain Khan said incorrect information had been presented against Khurshid Alam at the time and that the punishment imposed on him was therefore inappropriate. He added that this was why Alam was subsequently promoted to the positions of Executive Director and Deputy Governor.
Regarding the appointment of Khurshid Alam as chairman of Islami Bank, the Bangladesh Bank spokesperson said the central bank believes its decision is correct and will not reverse it under any kind of movement or pressure.
He said that if a decision is changed today due to pressure from one group, then in the future another group may stage a larger movement demanding changes to other decisions. "No institution can be run in this way," he added.
On the issue of permission for an online meeting of the Islami Bank board of directors, Arif Hossain Khan said the bank had sought approval to hold a virtual meeting due to special circumstances, which Bangladesh Bank granted. He added that there is no restriction on holding board meetings online in such circumstances.
It is noted that even after allegations of embezzlement against Khurshid Alam were found to be substantiated, there was dissatisfaction and criticism within Bangladesh Bank, as only a stoppage of increments was imposed as punishment. Recently, after his appointment as Islami Bank chairman, the old allegations have resurfaced.
Amid allegations of loan defaults and controversy over past disciplinary actions, discussions about Khurshid Alam continue in various circles. However, Bangladesh Bank maintains that reports of loan default against him are incorrect and says the confusion needs to be clarified.
