BB probe into Union Bank: ‘S Alam staffer’ took Tk 118cr sans approval

A "staffer of S Alam Group" took out Tk 118 crore from Union Bank without any approval or following any banking norms, indicating how the controversial business conglomerate used the bank.

During a recent inspection, Bangladesh Bank also discovered that money was withdrawn from the bank even after its board was reconstituted in August.

The inspection team found the Chattogram-based business group and its associate companies took out Tk 17,229.10 crore from the bank through scams and irregularities, which is 67 percent of its total disbursed loans.

Outstanding loans of the lender stood at Tk 25,507 crore till December last year, BB data shows.

The central bank conducted the inspection last month based on the financial statement of the bank until December 2023.

S Alam Group and its beneficiaries got money out from the ailing bank even after the board of the shariah-based lender reconstituted by the central bank on August 27 this year.

The central bank inspection report said the Union Bank's Panthapath branch gave a loan of Tk 118.63 crore to a customer without any approval of the lender's head office.

The inspection team found a mobile phone number on the account opening form, but it was switched off.

The inspection report said the customer who got the loan is an employee of S Alam group as per the information provided by the bank.

The central bank detected that the beneficiaries of the loan belong to S Alam Group.

Union Bank approved Tk 11,423.13 crore loans to 247 beneficiaries of companies of S Alam Group, and now the outstanding loans of the companies have stood at Tk 17,229.10 crore, the inspection report says.

The bank management and board were directly involved in approving the loans to their names and transferring the money to different accounts of the controversial group and its associate companies, it added.

Before reconstituting the board of Union Bank, many members of the S Alam family were in the board of the bank.

S Alam Group Chairman Mohammad Saiful Alam's siblings Halima Begum, Osman Goni, and Md Rashedul Alam along with his wife Marzina Sharmin and nephew Mohammad Mostan Billah Adil were in the board.

The inspection team found that Mudaraba Term Deposit Receipt (MTDR), which offers returns by depositing money for fixed period based on Mudaraba principles of Islamic Shariah, of Saiful Alam was cashed at Muradpur and Bandartila branches of Chattogram of the bank on August 11 and then the money was transferred to Khatunganj branch.

On September 3 and 9, bank Managing Director ABM Mokammel Hoque Chowdhury, considered a close ally of S Alam, withdrew Tk 2.32 crore from the bank when customers failed to get their deposited money back.

The Daily Star tried to reach Mokammel, who is absconding, over the phone but failed.

In August, Md Rashedul Alam, brother of S Alam, withdrew Tk 8 crore from Kodomtali branch of Chattogram and transferred the money to various accounts; Arshad Mahmood, a relative of S Alam, withdrew Tk 4.22 crore from Lichubagan branch of Chattogram; and a trading house of S Alam Group withdrew Tk 12.29 crore from Khatunganj and Agrabad branches, the BB probe has found.

The bank officials helped withdraw and transfer the money violating the central bank guidelines, the report mentions.

Its current Chairman Md Farid Uddin Ahmed and Deputy Managing Director Shafiuddin Ahmed did not respond to our phone calls and Whatsapp texts.

S Alam Group Chairman Mohammad Saiful Alam could not be contacted for comments.

Union Bank got its licence in 2013.