Freed from the grip of mafia-style management, FSIB hopes to turn the tide in December

Bangladesh’s banking sector has fallen into an abyss from which it seemed at one point in the past decade there was no way out. Ask insiders, especially bankers, and they will tell you that the completely unexpected transition of August 5 has, as a by-product, given the country’s banking sector a chance to turn itself around.

This turnaround is now visibly in the making as many banks have been freed from the grip of individuals who meant nothing but bad news for the sector as a whole.

“People saw that the state security services were being deployed to serve the interests of a business group that looked more like a mafia,” veteran banker Mohammad Abdul Mannan, the newly installed chairman of First Security Islami Bank, told UNB recently in an interview.

He should know, as he is one of the most high-profile victims of this criminal organization, which has been able to exercise its grip on the country’s vital banking sector with impunity.

In 2017, the new chairman of FSIB was at the height of his banking career, as managing director of Islami Bank Bangladesh Limited. IBBL, or Islami Bank, was by far the country’s largest bank at the time, before it was subject to a hostile takeover.

Incidentally, FSIB itself was the victim of a hostile, clandestine takeover by S. Alam Group. Today, both banks have been freed from the yoke of crony capitalism, along with four other banks, all taken over directly or indirectly by S. Alam Group in an astonishing series that has gone unchallenged.

“The new government asked me to become the chairman of FSIB, and I agreed to see it as a way to contribute to the country. So many young students have sacrificed their lives to build a new country,” he said.

Mannan shared what he has learned about the bank’s position since becoming chairman. He said he is still in the process, but he gave a glimpse:

“For example, I was shocked to find that some 2 million or 20 lakh people had deposited money with the FSIB – and yet more than 90 percent of that money was converted into loans taken by just 200 people,” he reveals.

However, he said: “I am very optimistic about this bank (FSIB). I have never been a pessimist. The bank will recover very quickly.”

“We are working day and night non-stop. I am also working on holidays like Friday-Saturday. I hope to be back next December. I would like to say to depositors: be patient. Get your deposit back. Let it rest for a while,” he pointed out.

Looking back at his resignation as Islami Bank’s managing director in 2017, Mannan, who only recently (after August 5) broke his silence on what happened, remained true to the story he first shared on August 30.

“I was thrown out of Islami Bank by signing a forged paper without a letterhead at gunpoint,” he says, before going into details.

According to his own account, on the morning of January 5, 2017, alleged agents of the Directorate General of Forces Intelligence (DGFI) picked up the then chairman, a vice chairman and Mannan, the managing director of Islami Bank, from their homes and took them to the agency’s headquarters.

There they were forced to resign, one after the other. Hours later, the bank’s board meeting was held under the noses of military officers in a Dhaka hotel, who chose their replacements.

“Absurdly, the reason for the dismissal of everyone who was forced to leave was given as ill health. Yet none of the supervisors questioned how everyone’s health deteriorated on the same day,” the banker revealed with a hint of frustration.

What made the situation so difficult for Mannan was that it was not just the S. Alam Group that had its sights set on IBBL. The fact is that the AL government itself was involved in the whole plot against his bank – the same bank he had worked with from the beginning.

Assuming that Islami Bank was owned by the Jamaat e Islami, which opposed the ruling Awami League, a decision was made at the highest levels of the government to effectively take the bank away from its then shareholders, by force if necessary.

“The negative publicity against Islami Bank, presumably to lay the groundwork for such an eventuality, began in 2006 when terrorist Siddique ul-Islam, also known as ‘Bangla Bhai’, was caught and news spread that IBBL cheque books had been found in his possession,” Mannan said.

Asked if this was not the case, Mannan is adamant that cheque books of 31 public and private banks were found. “But the headline in the newspaper was that IBBL cheque books were found on Bangla Bhai.”

He also criticizes people in responsible positions, such as Prof. Abul Barakat, calling them “thoughtless.”

“He (Barakat) said that Islami Bank spends Tk 1,200-1,700 crore every year on terror financing,” Mannan told UNB. “In this situation, the condition of Islami Bank was slowly becoming untenable, though I was still able to cope with it.”

Things really started to get tough from 2013 onwards, he says. That was when the trial of Jamaat leaders for war crimes was in full swing and public sentiment was working against them. It may be mentioned here that while there are no direct links between the party and the bank, the bank’s long-term chairman Mir Kashem was a senior Jamaat leader until he was executed for war crimes and crimes against humanity committed in 1971,

“At that time, not only Islami Bank but the entire Islamic banking sector was going through a real disaster,” he said.

“No bank in the world could have survived such a political backlash,” Mannan said. “Every day, there were negative headlines in the newspapers. Branches were attacked, ATMs were vandalized. Many people tried to take over Islami Bank at that time. Until 2016, I was successful in preventing that,” Mannan said.

Then came the horrific experience of being forced to resign in the first week of 2017, after which he left the country. Today, more than seven years later, that victim of one of the worst episodes of Sheikh Hasina’s 15-year rule, is back to provide much-needed leadership in the banking sector.