Md Asadul Islam, former senior secretary of the Financial Institutions Division of the finance ministry, is still serving as chairman of Sonali Bangladesh UK Ltd, a subsidiary of state-run Sonali Bank, despite retiring from government service in 2021.

This violates the rules of the ministry.

The government can appoint officials as directors of the boards of subsidiary companies of state-run banks and financial institutions, as per the circular of the Ministry of Finance dated March 19, 2017.

The post of the director concerned will be considered vacant immediately if the director nominated by the government for the subsidiary company retires or is no longer employed, mentions paragraph "chha" of the circular.

However, Islam is still the non-executive chairman of Sonali Bangladesh UK, a UK-based financial institution providing trade finance services to Bangladesh.

The government appointed Islam as senior secretary in 2019 and posted him to the Financial Institutions Division for two years on a contractual basis.

He was then nominated as the director of Sonali Bangladesh UK and became the chairman of the company on February 3, 2020.

Sonali Bank documents show that Islam is still holding the position of chairman of the company, although his tenure at the Ministry of Finance ended in 2021.

Bangladesh Bank directed Sonali Bank in September last year to explain how a retired official is still serving as the chairman of a finance company under a state-run bank.

In December last year, Sonali Bank submitted an explanation regarding the appointment of Islam.

In the explanation letter, Sonali Bank stated that Islam was appointed as chairman of Sonali Bangladesh UK and a non-executive director (NED) on January 13, 2020, as per the instructions of the Ministry of Finance.

The letter further mentioned that the Financial Institutions Division of the Ministry of Finance re-appointed Islam as chairman of the company in May 2022.

Officials of Sonali Bank stated that Islam's tenure would end on January 31 of this year, as per the contract.

Shareholders were informed about the term and renewal of the directorship of all directors through the agenda on "directors' appointment or re-appointment" at the company's 2023 and 2024 annual general meetings, the letter noted.

When contacted, Mohammad Muslim Chowdhury, chairman of Sonali Bank, told The Daily Star that there was a logical issue behind Islam still being in the post.

The interim government may not have made a decision yet in this regard, which is why he is still in the post, but the government will hopefully take a decision soon, he said.

The government owns a majority of the company's shares, he added.

Attempts were made to reach Islam via phone and WhatsApp messages, but he did not respond to calls until the filing of this report last night.

Sonali Bangladesh UK was set up in the United Kingdom after the operations of Sonali Bank (UK) were closed on August 16, 2022.

Sonali Bank UK had been on the verge of closure for a long time after the Bank of England fined the company and its then-chief executive officer on various charges, including non-compliance with laws, in 2016.

The new company continues to provide LC (letter of credit) advising, confirmation, and discounting services for the international business of Bangladeshi commercial banks.

Sonali Bank (UK) was formed in 2001 with 51 percent ownership by the Finance Ministry and 49 percent by Sonali Bank.

Apart from Sonali Bangladesh UK, the state-run lender has another entity—Sonali Pay UK—to provide remittance services to the British Bangladeshi diaspora.