A renewed debate has emerged within Bangladesh’s financial sector following allegations involving substantial liquidity support from the central bank, irregularities in dollar transactions, and the partial waiver of financial penalties imposed on a major commercial lender. The episode has raised broader questions about governance, compliance, and transparency in foreign exchange management.
According to official sources and internal documents, Islami Bank Bangladesh PLC experienced acute liquidity stress during a period when it was under the influence of the S Alam Group. To stabilise its position, the bank reportedly received significant liquidity assistance from Bangladesh Bank between December 2023 and June 2024.
Financial assistance and related concerns
During this period, the bank is said to have obtained support in five separate tranches, totalling approximately Tk 13,000 crore. The assistance was linked to dollar purchase arrangements, involving an estimated $600 million in foreign exchange transactions. However, concerns later emerged that the corresponding dollars were not duly reflected in the central bank’s foreign exchange accounts within the expected timeframe, creating discrepancies in financial records.
Subsequent internal reviews indicated that this mismatch contributed to broader inconsistencies in the settlement of foreign exchange obligations. As a result, regulatory scrutiny intensified over the bank’s treasury operations and compliance with standard reporting requirements.
Penalty and partial waiver
Following the identification of these irregularities, the bank was reportedly fined around Tk 37 crore. In a later development, approximately Tk 18.5 crore of the penalty was waived. Questions have since been raised regarding procedural transparency, with allegations that the waiver was granted without a formal request from the bank and without full board-level approval.
Summary of key developments
| Period | Event | Amount |
|---|---|---|
| Dec 2023 – Jun 2024 | Liquidity support linked to dollar purchases | ~Tk 13,000 crore |
| Same period | Dollar purchase agreements | ~USD 600 million |
| Subsequent phase | Regulatory penalty imposed | ~Tk 37 crore |
| Later decision | Partial penalty waiver | ~Tk 18.5 crore |
| Internal assessment | Estimated accounting discrepancy | ~Tk 31–37 crore |
Governance and wider implications
Internal audit observations suggest that receiving substantial liquidity support without corresponding and timely foreign exchange settlement may constitute a serious deviation from international banking norms. Such discrepancies can heighten foreign exchange risk exposure and undermine confidence in the broader banking system.
A senior official from Islami Bank Bangladesh PLC noted that the current management is still reviewing legacy treasury decisions taken under previous control, and that complete documentation regarding certain transactions is not fully available. However, the official acknowledged that procedural irregularities have been identified and are under internal review.
Separately, allegations have persisted that the S Alam Group acquired influence over the bank in 2017, subsequently reshaping its financial structure through lending and fund transfer activities. These claims have also prompted scrutiny of the regulatory oversight exercised during that period.
Economists and banking analysts argue that any weakening of enforcement discipline or lack of transparency in decision-making by the central bank could undermine systemic stability. They have therefore called for an independent and comprehensive investigation to establish accountability and strengthen safeguards against future irregularities.