The Bangladesh Bank (BB) has unearthed fresh loan irregularities at Islami Bank Bangladesh, even after the board of directors was restructured following the fall of the Sheikh Hasina-led government in August last year.

The banking regulator found the involvement of Md Abdul Jalil, independent director and executive committee chairman of the bank, in these loan irregularities.

After detecting the rule violations, the central bank on January 12 asked the chairman of the bank to provide an explanation within five working days.

LOAN IRREGULARITIES

Prior approval from the central bank is now mandatory for Islami Bank to disburse loans of over Tk 5 crore, according to a central bank inspection report.

However, the commercial lender's executive committee, on December 10 last year, approved a loan rescheduling facility of Tk 210 crore and a fresh loan of Tk 40 crore as working capital for TRU Fabrics Ltd, said the report.

The probe report reviewed a relevant executive committee memo. It showed that the rescheduling and fresh proposals were presented before the bank's executive committee without any approval from the central bank.

Md Abdul Jalil, chairman of the executive committee, is liable for the irregularities, the report stated.

He worked as a finance advisor at TRU Fabrics Ltd and its associate company, Unifill Textile Mills Ltd, for more than six years before joining the bank as a board member, as per the BB probe.

The Shariah-based bank cancelled both the loan rescheduling and loan approvals on December 23 last year.

However, the fresh fund was allowed to be withdrawn between December 10 and December 26, which is a serious irregularity, according to the BB inspection report.

Various other irregularities came up in the central bank's probe report, including loans being taken for one company to adjust the loans of another company.

The BB report said TRU Fabrics Ltd was given Tk 10.19 crore, exceeding its exposure limit.

It also mentioned that the bank did not conduct an on-site inspection of the company's goods as per the Guidelines on Credit Risk Management. The company's ability to repay the bank loans was also not analysed, it added.

An office room had been allocated for Jalil at the head office of the bank, which is a violation of the central bank's circular, it said.

Jalil also appointed one of his relatives at a subsidiary of the bank, which is a conflict of interest, the BB report said.

The Daily Star tried to reach Islami Bank Chairman Md Obayed Ullah Al Masud and Managing Director Mohammadi Monirul Mawla, but neither responded to phone calls till the filing of this report last night.

When contacted, Jalil told this newspaper that not only himself but also the board of directors approved the loans.

"There is no irregularity here, and the company is a reputed and old client of the bank," he pointed out.

The issue is now being handled by the board of directors, he said, adding that the bank was preparing to provide an explanation about the issue to the central bank.