Pubali Bank Limited, one of Bangladesh’s oldest and most established privately owned banks listed on the stock market, is facing an increasingly severe crisis of corporate governance that threatens to undermine its institutional standing. What began as sporadic compliance concerns has now evolved into a sustained pattern of governance failure, marked by entrenched boardroom power struggles, apparent regulatory defiance, and repeated operational irregularities. Collectively, these issues have raised serious questions about the bank’s transparency, accountability, and long-term credibility within the country’s financial system.
For years, the bank’s board of directors has reportedly been riven by internal divisions, with competing interests exerting influence over strategic and operational decisions. Despite court rulings and formal directives from regulatory authorities, the existing board structure has largely remained unchanged, fuelling allegations that legal and supervisory instructions have been ignored or selectively implemented. This prolonged stalemate at the top has coincided with persistent irregularities in foreign exchange transactions and loan-related activities, further eroding confidence among shareholders, depositors, and market analysts.
An interim investigation conducted by Bangladesh Bank’s Financial Integrity and Customer Services Department (FICSD) has brought some of the most troubling practices into sharper focus. According to the investigation, several branches of Pubali Bank charged importers exchange rates well above the officially prevailing market rates when settling import letters of credit (LCs). Under established banking regulations, any excess amount collected during such transactions must be credited to the bank’s income account. Instead, investigators found that these funds were diverted directly to the accounts of selected customers, in clear breach of banking laws and foreign exchange control regulations.
One particularly striking example emerged from the bank’s Barishal Bazar Road branch. In January 2024, Mohammadi Electric Wire and Multi Products Limited opened an import LC valued at USD 223,000. At settlement, the bank reportedly charged approximately BDT 6.5 more per US dollar than the market rate, resulting in an excess collection of around BDT 1.45 million. Rather than being recorded as bank revenue, the amount was transferred on the same day to a current account held by Rifat Garments Limited at Pubali Bank’s Motijheel corporate branch.
This transaction has drawn intense scrutiny due to the beneficiary’s corporate affiliations. Rifat Garments Limited is linked to the Ha-Meem Group, one of Bangladesh’s largest industrial conglomerates. Notably, Abdus Razzak Mondal, a representative of the Ha-Meem Group, serves as an influential director on Pubali Bank’s board. This connection has intensified allegations of conflicts of interest, board-level influence, and abuse of authority.
Similar patterns were identified at the bank’s Sylhet branch, where investigators found that approximately BDT 880,000 in excess funds collected from four import LCs opened by Messrs Hasan and Brothers were transferred to the same Rifat Garments account using identical methods.
The FICSD report documents consistent excess charges ranging from BDT 6.5 to BDT 8 per US dollar across multiple transactions. Analysts contend that such sustained irregularities would not have been possible without weak internal controls, ineffective board oversight, and potential collusion within senior management. Without swift and transparent corrective action, observers warn that Pubali Bank risks enduring reputational damage and a further erosion of trust in Bangladesh’s banking sector.