Union Bank, FSIB take action against 456 officials over irregularities, loans to S Alam

Authorities of Union Bank and First Security Islami Bank have taken decisive action against 456 officials for their involvement in recruitment irregularities and granting loans to S Alam Group under false names.  

Union Bank has sacked 262 officials, while the FSIB has withdrawn 194 in a move to address the irregularities, according to the banks. 

The banks informed the officials concerned of their decision on Monday.

Among the FSIB's officials, who were also accused in money laundering, 24 of them are branch managers from its Chattogram region and have now been attached to their respective regions.  The dismissed branch managers have been given 21 days to recover outstanding loans approved during their tenure.

Khurshid Alam, manager of FSIB Chattogram's Khulshi branch, is one of them. He is Akiz Uddin's brother, who worked as personal secretary of Saiful Alam, chairman of S Alam Group.

FSIB Chairman Mohammad Abdul Mannan confirmed the action, saying the new board of directors decided to withdraw the officials after uncovering irregularities in the bank.

An FSIB official, requesting anonymity, said the current management uncovered irregularities in the disbursement of significant loans from the branches in Chattogram to Mohammad Saiful Alam, owner of the S Alam Group.

A large number of loans were issued by creating entities under his name and false identities. The new board has started action against the guilty officials and employees to prevent the bank from collapsing, the official added.

The decision to withdraw the 194 officials came after the bank conducted a special audit of its Chattogram branches.

Meanwhile, on 17 November, the Union Bank's board of directors meeting decided to terminate several of its junior officers, who had been hired in February, to reduce costs. The bank reportedly did not conduct any tests for their recruitment.

The dismissed officials are of the rank of trainee assistant officers and trainee assistant cash officers. 

Both banks had been under S Alam Group's control for a long time. Following the ousting of the Awami League government in August, Bangladesh Bank intervened to free the institutions from S Alam's grasp.

Before this, the group had withdrawn substantial funds from the banks under pseudonyms. As a result, the banks are now suffering from a liquidity crisis, according to officials of both banks.

On 27 August, the Bangladesh Bank restructured the board of Union Bank and dissolved the boards of seven other banks controlled by S Alam Group. The central bank appointed five independent directors to Union Bank.

An inspection by the central bank revealed that 64% of Union Bank's loans – equivalent to Tk18,000 crore – were disbursed to entities linked to S Alam Group.

Similarly, First Security Islami Bank reported irregularities involving Tk35,000 crore in loans taken by S Alam Group under false names.