Friday | 14 February 2025 | Reg No- 06
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Friday | 14 February 2025 | Epaper

In The Aftermath of Regime Change

FSIB gains clients' confidence and recovers Tk 515cr defaulted loans in one month: Chairman

Exclusive Interview

Published : Monday, 14 October, 2024 at 12:00 AM  Count : 1804
Mohammad Abdul Mannan, Chairman of First Security Islami Bank PLC (FSIB)  said his bank has recovered over Tk 515 crores of default loans in the last one month, after the interim government took up charges of the country.

Abdul Mannan, former managing director of Islami Bank Bangladesh Limited, is back to regular banking after seven and a half years and has taken the helm of the FSIB being elected as the chairman of the new board He has also been elected recently as Chairman of Islamic Banks Consultative Forum (IBCF) and Bangladesh Association of Banks. 

In an exclusive interview with The Daily Observer, he talked about his role and actions as the chairman of the board of FSIB. He said after joining the bank his top priority is to salvage it from the ruins that happened to the bank following its capture by S Alam Group.

Abdul Mannan said, his joining in the bank and the reshuffle of the board has encouraged opening of over 34,880 new accounts and it fetched more than Tk 34 crore in new deposits. Many believe his joining the bank has restored confidence of clients in the FSIB.

He said the current board will not prevent any account from being declared in default. To a question how the political changeover has impacted the banking sector, he said during the last decade most private banks have turned into family based banks running operations ignoring normal banking practice. FSIB become just one man bank.  

He said banks were not structured the way they needed to be. Employees are not trained. Bad culture should be stopped. Good governance must prevail. Who will be on the Board needs to be determined. Common people have 90 per cent share in a bank. They should have a representative on the Board. 

On a question how banks are planning to recover default loans; especially held by big corporate houses as many have shifted money abroad, he said all that happened with political backing. Powerful hands behind such moves acted to plunder the people's bank with support from handful staff members when Board has no authority at all.   
 
Abdul Mannan said the current Board is very strong and the situation is turning normal. He said as reforms are taking place weak banks will not remain weak in next three months. We will not be in receivership then. We can keep branches open with our bank money. I can pay clients properly when they give the check.  

Investments should go to marginalized people; he said and wondered how the FISB could distribute Tk 28 lakh crore to only 200 borrowers. We stopped such practice and trying to recover the loans. Branches have been instructed to invest across the country and the economy. "I can give more investment to small entrepreneurs in marginal areas." he said.

To a question as most banks were plundered, especially nine shariah based banks, how wrongdoers can be held accountable because they are powerful. 

Abdul Mannan said there is no need to impose  new penalty. They should be punished according to existing law. Everyone should take care that no one is left out of the law. Saudi Arabia has exemplary punishment and there is less crime, he cited example.  
What has happened in Bangladesh in last seven to eight years is unprecedented, No country in the world has seen so much corruption, looting and consolidation in the banking sector. So the punishment needs to be severe so that such corruption does not happen in future. The banking sector is in dire straits because of misdeeds of those who aided corruption.

Mannan said most private banks saw change in their Boards. Most banks turned  family based banks having up to four directors from a family and lent money to Board members or projects  having family interest. 

The managing directors (MD) could not discharge their duties. They were supposed to be accountable to the Central Bank but the rules were bypassed while money was smuggled abroad. The interim government has constituted 11 Boards after coming to power and they have to clear the mess in the banking sector. 

Abdul Mannan said since Islamic banks are operated according to Islamic Shariah, good governance is given a lot of importance here. There are many internal audits, Bangladesh Bank audits and external audits. Shariah audit is seriously taken care. That is why Islamic banks are far ahead in terms of policy regimes. People's wealth is invested in banks and we believe it must be properly protected, he asserted. 

Mannan said troubles in banking sector started in 2011 when 2 per cent director's shares became mandatory. Skilled managers left while S Alam Group captured Islami Bank in 2017. He stressed that Bangladesh Bank should be allowed to work independently and without any political influence or pressure. 

He said if MDs are accountable to the central bank, irregularities can be reduced. Islamic Banking Act should be made that will make the entire banking sector including Islamic banks prosperous. There should be a separate department in Bangladesh Bank headed by a Deputy Governor for the Islamic Banks, he suggested.



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