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Bismillah Group scam: Tk 1,200cr banking fraud

Fresh convictions but recovery remains a major challenge

Published : Saturday, 31 October, 2026 at 5:16 PM

By M. A. Latif

Symbolic Photo

• A decade after the scandal surfaced, multiple criminal cases, fugitive convicts and questions over loan recovery continue to highlight weaknesses in Bangladesh’s banking oversight.

More than a decade after the Bismillah Group loan scam came to light, the alleged misappropriation of around Tk 1,200 crore from several banks remains a major case study in financial crime, money laundering and accountability in Bangladesh.

The scandal involving the export-oriented textile and terry towel business triggered multiple criminal cases, investigations by the Anti-Corruption Commission (ACC), court proceedings and questions about the role of bank officials in approving loans against allegedly forged export documents.

Although courts have handed down prison sentences in separate money laundering cases, the whereabouts of several key convicts and the recovery of the disputed funds remain central concerns. The latest major publicly reported development was a February 27, 2025 verdict sentencing eight people to 12 years imprisonment each in a money laundering case involving more than Tk 124 crore. The court also ordered the confiscation of their movable and immovable properties.

How the scam unfolded

The Bismillah Group scandal emerged in 2013 following allegations that the group and its associated companies had obtained substantial amounts of money from five banks through fraudulent export documentation, irregular letters of credit (LCs) and other allegedly unlawful banking transactions.

According to the ACC's investigation, the group and its associated entities allegedly misappropriated Tk 1,174.46 crore through funded and non-funded banking facilities.

The amount comprised Tk 990.03 crore in funded liabilities and Tk 184.43 crore in non-funded liabilities, according to the commission's published investigation figures.

The banks identified in the investigation included state-owned Janata Bank and private lenders Prime Bank, Premier Bank, Jamuna Bank and Shahjalal Islami Bank.

Investigators alleged that forged export contracts and documents were used to obtain financing and that export proceeds associated with 132 letters of credit were not repatriated to Bangladesh as required.

The ACC's 2014 annual report described alleged irregularities involving export bills, back-to-back LCs and forced loans, raising questions about compliance with foreign-exchange regulations and the responsibilities of the banks officials.

The investigation pointed to possible collusion between company representatives and banking personnel in processing transactions that should have attracted closer scrutiny. These allegations formed the basis of criminal proceedings against company executives and several bank officials.

Twelve cases against 54 people

On November 3, 2013, the ACC filed 12 cases against 54 people in connection with the alleged misappropriation of approximately Tk 1,200 crore.

The accused included Bismillah Group executives and bank officials. The cases were filed with police stations in Dhaka, including Ramna, Motijheel and New Market.

Investigations subsequently resulted in charge sheets and court proceedings began in different cases. The allegations covered financial irregularities, fraud and money laundering, with the precise amounts and accused persons varying from case to case.

The cases exposed a wider problem: substantial bank financing could allegedly be secured through documents purporting to establish export transactions without adequate verification of the underlying commercial activities.

The scandal also raised concerns about internal controls, credit approval procedures and the effectiveness of regulatory supervision.

However, the allegations against individual defendants must be distinguished from the findings in each case. Criminal liability depends on the evidence and the court's decision in the particular proceedings.

Two major money laundering verdicts

The legal proceedings have produced significant convictions in at least two separate money laundering cases.

On September 10, 2018, a Dhaka special court sentenced nine people, including Bismillah Group Managing Director Khaza Soleiman Anwar Chowdhury and group Chairman Nowrin Habib, to 10 years imprisonment each in a money laundering case.

The court also imposed fines totalling approximately Tk 30.67 crore. Reports at the time said the convicted individuals were at large and that arrest warrants had been issued against them.

A further verdict came on February 27, 2025, when Dhaka Special Judge's Court-5 sentenced eight people to 12 years rigorous imprisonment each in another money laundering case.

The convicts were Khaza Soleiman Anwar Chowdhury; his wife, Nowrin Habib; his father, Shafiqul Anwar Chowdhury; Bismillah Group Deputy Managing Director Akbar Aziz Muttaki; General Manager Mohammad Abul Hassan Chowdhury; Manager Riaz Uddin Shafi; Network Frame System Limited Chairman Akhter Hossain; and former Jamuna Bank Deputy Managing Director Mozammel Hossain.

The case concerned the laundering of approximately Tk 124.82 crore. The court imposed fines of Tk 248.85 crore and directed that the money be deposited into the government treasury within 60 days. It also ordered the confiscation of the convicts movable and immovable assets.

Two other accused, former Jamuna Bank senior assistant vice-presidents Mohammad Morshedur Rahman and SM Zahidul Islam, were acquitted in that case because the charges against them were not proved.

The latest verdict demonstrates that the financial scandal has continued to carry criminal consequences years after the original allegations surfaced. Nevertheless, a conviction and a financial penalty do not automatically translate into the recovery of the money allegedly taken from lenders.

Fugitive convicts and enforcement challenges

The pursuit of the group's principal figures has been a recurring issue in the proceedings.

On February 25, 2020, the High Court directed law enforcement agencies to take steps to arrest seven fugitive accused, including the group's managing director and chairman, and ordered that an Interpol red alert be sought to facilitate their arrest.

The court also directed the police chief and the director general of the Rapid Action Battalion to report on the implementation of its order.

The development underscored the difficulty of enforcing court decisions when defendants remain outside the reach of domestic law enforcement.

In February 2025, reports on the latest money laundering verdict again described the eight convicted individuals as being in hiding. The court issued arrest warrants, and the sentences were to take effect upon their arrest or surrender.

As of October 31, 2026, it could not verify a reliable, newer public report confirming the arrest of the principal convicts or the execution of the latest confiscation order. Their current whereabouts, the status of any international arrest notices and the enforcement of the sentences therefore require confirmation from the relevant authorities.

The distinction is important: a judicial order to arrest a convict is not evidence that the arrest has been carried out.

The unresolved question of loan recovery

While criminal proceedings have resulted in prison sentences, the financial consequences extend beyond the defendants.

The scandal involved several lenders, including Janata Bank, a state-owned institution that uses public deposits to finance its operations. The alleged losses therefore raise questions about the protection of depositors money and the ultimate financial burden of unrecovered loans.

A December 2020 report by Dhaka Tribune said Janata Bank's exposure to the group had grown to Tk 560 crore and that the bank had approved a rescheduling of the defaulted loans. The report also said Jamuna Bank had recovered Tk 7 crore through the sale of mortgaged properties and had initiated recovery proceedings against the group.

These figures describe the position reported in 2020; they should not be treated as a verified account of the banks current outstanding claims or recoveries.

An updated assessment would require bank-by-bank information on the outstanding principal, accrued interest, amounts recovered, assets sold, pending financial-loan suits and the current status of any rescheduled facilities.

The distinction between criminal punishment and financial recovery is crucial. A prison sentence punishes an offence, while a money judgment or confiscation order must be enforced through the applicable legal procedures before funds or assets can actually be recovered.

Legal proceedings: what remains to be established

The Bismillah Group cases involve several distinct legal processes and their outcomes should not be conflated.

First, criminal accountability: The courts have delivered convictions in separate money laundering cases. The authorities must enforce the sentences and establish the status of any outstanding warrants.

Second, asset confiscation: The February 2025 court ordered the confiscation of the convicted individuals' movable and immovable property. The implementation of that order, identification of assets and any necessary enforcement proceedings should be documented by the competent authorities.

Third, recovery of bank loans: The banks must establish the amounts legally recoverable from the borrowers and guarantors and pursue the relevant proceedings before the Artha Rin Adalat, where applicable. Criminal convictions alone do not establish that all bank liabilities have been recovered.

Fourth, accountability of bank officials: The original cases also involved allegations against banking personnel. Their responsibility must be assessed individually, based on the charges and evidence in each proceeding. The acquittal of two defendants in the 2025 case illustrates why blanket conclusions about all accused persons would be inappropriate.

Fifth, international enforcement: If convicted individuals or assets are outside Bangladesh, authorities may need to pursue applicable international cooperation mechanisms. The present status of any such action requires confirmation rather than assumption.

A complete legal update should therefore obtain the latest case-status information from the ACC, the relevant special judge courts, the police and the banks concerned.

Regulatory lessons from the scandal

The Bismillah Group affair exposed weaknesses in the verification of export transactions and the management of trade-finance risks.

Letters of credit and export bills are legitimate instruments of international commerce. However, where financing depends on false documentation or transactions that cannot be independently verified, lenders face substantial risks of fraud and money laundering.

Effective prevention requires independent verification of export contracts, shipping and customs records, foreign-exchange transactions and the repatriation of export proceeds. Banks must also ensure that credit approvals comply with regulatory requirements and that suspicious transactions are escalated promptly.

Internal audits, independent risk assessments and effective action against employees involved in misconduct are equally important. Where serious irregularities are established, accountability should extend to every person whose individual role is supported by evidence.

The scandal also demonstrates why the timely exchange of information among the ACC, Bangladesh Bank, financial intelligence authorities, law enforcement agencies and courts is essential.

Convictions are not the end of the case

The Bismillah Group scandal remains an important test of Bangladesh's ability to pursue complex financial crimes beyond the initial filing of cases.

The 2018 and 2025 money laundering verdicts represent significant judicial outcomes. Yet the wider questions concern enforcement: whether the convicted individuals are brought within the reach of the law, whether confiscation orders are implemented and how much of the outstanding money is ultimately recovered.

For the banking sector, the case is a reminder that preventing fraudulent lending requires more than formal approval procedures. It demands rigorous document verification, effective internal controls and accountability at every stage of a transaction.

For the public, the central issue is straightforward: criminal proceedings must lead to enforceable consequences and the pursuit of those responsible must be accompanied by a transparent effort to recover the money.

More than a decade after the scandal emerged, the definitive measure of accountability will be not only the sentences imposed but also the demonstrable enforcement of court orders and the recovery of funds wherever legally possible.