Despite authorising an unauthorised, collateral-free loan of 45 crore taka to three companies owned by a former Awami League Member of Parliament (MP), AKM Mahbub Morshed remains in his position as senior executive vice president (SEVP) of Islami Bank Bangladesh PLC (IBBL).
This unauthorised transaction, among other actions, has contributed to a notable increase in the bank's default loans.
Currently stationed at Islami Bank’s head office, Morshed allegedly facilitated the loan scheme during his tenure as branch manager at the Nawabpur Road branch.
The firms, controlled by Abul Kalam Azad, former MP for Cumilla-4, have shown no efforts toward loan repayment.
Azad is reportedly evading authorities, with his firms now collectively defaulting on loans amounting to 185 crore taka, largely due to Morshed’s financial dealings.
A series of reports from IBBL officials indicates that Azad and his firms, including Dhaka Breeders and Hatchery Ltd, Toyo Feed Ltd, and Al Amin Agrovate Ltd, were beneficiaries of loans arranged without proper authorisation from the bank’s head office, often without any collateral. In total, these companies were provided with 44.86 crore taka in credit, orchestrated solely by Morshed without adhering to standard banking protocol or notifying superiors.
In addition, Morshed had previously granted 19.04 crore taka in loans to these companies, again circumventing the need for authorisation and collateral.
These financial practices were intended to benefit Azad’s enterprises, including an existing approval for 10 crore taka to Al Amin Poultry Feed, part of the same corporate group.
However, providing loans to additional entities within the group without sufficient collateral is a violation of bank regulations.
Furthermore, under Morshed’s directive, an import LC (Letter of Credit) was issued with an initial 100% margin.
However, this requirement was later bypassed, and the LC was processed without any financial backing.
Bank officials were reportedly pressured to release essential documents for the client’s use, even though the expected recovery of funds remained unfulfilled.
The central office’s approval allowed for 55 crore taka and 15 crore taka in loans to Toyo Feed Ltd. and Al Amin Agrovate Ltd, respectively, which should have been secured with collateral valued at 44.78 crore taka in land, buildings, and equipment.
Instead, Morshed accepted assets worth only 5 crore taka as collateral, yet disbursed 65.84 crore taka in loans.
Following internal audits, IBBL’s governance committee recommended disciplinary action, but this recommendation was withheld amidst political pressure and influence.
Morshed has reportedly leveraged affiliations with influential political figures to stave off consequences, threatening bank executives and compelling them to suppress further investigation.
Officials from IBBL’s head office expressed concerns over the bank’s financial stability, with multiple officers calling for a neutral investigation by Bangladesh Bank, the Criminal Investigation Department (CID), and the Anti-Corruption Commission (ACC).
They assert that such investigations would reveal further instances of misconduct and abuse of power involving Morshed, potentially exposing a larger web of banking irregularities.
Efforts to obtain a comment from Islami Bank’s CEO, Md. Munirul Mawla, were unsuccessful, and when contacted, Nazrul Islam, the bank’s head of public relations, refrained from making any statement.
