Twenty-six export-oriented garment manufacturers have formally requested a comprehensive investigation and immediate remedial action over alleged fraudulent loans generated in their names. The financial irregularities, reportedly worth hundreds of billions of taka, were executed at the Narayanganj branch of Premier Bank PLC. The affected factory owners made their grievances public during a press conference convened at the Economic Reporters’ Forum on Saturday, 16 May 2026.
Mechanics of the Alleged Loan Fraud
According to a written statement delivered by Arifur Rahman, the owner of Dowas Land Apparels, the institutional irregularities occurred between 2017 and 2023. This period coincided with the tenure of HBM Iqbal, who served as the chairman of Premier Bank PLC during the administration of the Awami League-led government.
The exporters alleged that branch officials, acting in collusion with the bank’s head office and the then-chairman, initiated massive financial liabilities without the knowledge or consent of the factory owners. This was reportedly achieved by opening unauthorised, “fake” back-to-back letters of credit (LCs). The mechanism involved using falsified identification documents to generate forged sales contracts.
In a standard transaction, an exporter shipping goods worth 10 million BDT would legally qualify for back-to-back LC facilities valued at approximately 7.5 million BDT. However, the garment manufacturers asserted that the branch opened LCs worth up to 75 million BDT in certain instances, despite no actual raw materials being imported.
Comparison of Legitimate vs Alleged Fraudulent Credit Allocation
The following table illustrates the operational discrepancy detailed by the affected manufacturers regarding credit limits and liabilities:
| Transaction Component | Standard Regulatory Framework | Alleged Fraudulent Practice | Case Study: Total Fashion |
| Back-to-Back LC Eligibility | ~75% of actual export value (e.g., 7.5m BDT on a 10m BDT export) | Up to 750% of actual export value (e.g., 75m BDT on a 10m BDT export) | Approved Limit: 500 million BDT |
| Liability Settlement Method | Adjusted directly via incoming export proceeds | Adjusted via dollar purchases from ‘Premier Exchange’ | Actual Utilisation: 480 million BDT |
| Resulting Financial Status | Balanced account upon trade completion | Unauthorised conversion into customer loan liabilities | Discovered 2023 Liability: 3.60 billion BDT |
Impact on Industry and Regulatory Inaction
The garment manufacturers disclosed that fraudulent liabilities have been attached to the accounts of 43 separate companies at the Narayanganj branch, including the 26 export-oriented garment factories represented at the forum. These 26 enterprises previously provided employment to a combined workforce of approximately 28,000 to 30,000 individuals. Due to the artificial debt burden, several of these manufacturing units are now facing closure or are struggling to maintain daily operations.
A prominent example cited was Total Fashion. The company had initially utilised 480 million BDT out of an approved 500 million BDT loan facility. By 2023, the management discovered that its total loan liability had expanded to 3.60 billion BDT. Despite lodging formal complaints with Premier Bank’s head office, Bangladesh Bank, and the High Court, the company was unable to acquire transparent documentation regarding how the debt accumulated.
The affected business owners questioned how these large-scale discrepancies repeatedly bypassed internal audits from the bank’s head office, as well as external audits performed by Bangladesh Bank. The factory owners noted that they had submitted 22 separate letters to the central bank seeking intervention, but received no prior remedy. Furthermore, despite explicit directives from the High Court, Premier Bank has reportedly failed to disclose the individual loan breakdowns for each customer account.
Current Investigative Actions
In response to the growing dispute, significant regulatory and institutional actions have commenced:
Forensic Audit Deployment: A total of six local audit firms, alongside the multinational professional services firm Ernst & Young (EY), have been appointed to conduct a comprehensive forensic audit into all alleged irregularities across Premier Bank PLC.
Branch-Specific Probe: The recently reconstituted board of directors of the private commercial bank has commissioned an external audit firm to perform a special investigation focused explicitly on the Narayanganj branch. A senior bank official confirmed that a preliminary report from this firm is expected by the end of the current week.
Internal and Central Bank Oversight: Premier Bank has established a high-level internal committee to scrutinise the matter. Concurrently, Bangladesh Bank has formally demanded detailed account statements regarding the 26 affected garment manufacturer accounts to independently assess the scope of the fraud.