The Managing Directors (MDs) of six crisis-hit banks have been placed on compulsory leave to facilitate an international audit, as instructed by Bangladesh Bank (BB), officials said.

The directive is aimed at shariah-based banks owned by S Alam Group.

First Security Islami Bank (FSIB) has already acted on this instruction, sending its MD, Syed Wasek Md Ali, on forced leave for the next three months.

The decision was made in an emergency meeting of the bank’s board of directors on Saturday (January 4).

Mohammad Abdul Mannan, FSIB’s chairman, confirmed the development. The bank’s Additional Managing Director, Abu Reza Md. Yahia, has been appointed as acting MD.

Five more banks are on the central bank’s list for similar actions. These are Union Bank, Global Islami Bank, Exim Bank, ICB Islami Bank and Social Islami Bank. The process of sending their MDs on leave is currently underway.

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An official from BB revealed that an emergency meeting with the boards of directors of these banks was held last Thursday (January 2).

Bangladesh Bank spokesperson Husneara Shikha said, "The decision for the six bank MDs to remain on leave is a collective resolution by the respective banking boards. Bangladesh Bank will conduct audits and asset quality reviews on these six banks.”

This measure, she said, aims to prevent the managing directors from making undue interventions during the process. “The leave is temporary at this stage. If they are found innocent after the audit, they will be allowed to resume their roles without any restrictions. However, if irregularities are detected, appropriate actions will be taken following due regulations. This decision by the central bank aligns with international practices."

During the meeting, the central bank ordered the removal of senior officials, including MDs closely associated with S Alam Group, to ensure a transparent investigation and further necessary actions.

In compliance with these instructions, FSIB’s board promptly convened and decided to send its MD on leave.

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Meanwhile, Social Islami Bank, which has recently been freed from S Alam’s control, has scheduled an emergency board meeting for Sunday (January 5).

Similar changes to the leadership of the other banks are anticipated soon.

Mohammad Abdul Mannan, who took over as chairman of FSIB on September 1 following a BB-led restructuring of the board, said the move aligns with efforts to reform the banking sector. He replaced Saiful Alam Masud, head of S Alam Group, who previously chaired the bank.

Mannan himself was removed from Islami Bank in 2017 after S Alam took control.

A chairman of another affected bank, speaking on condition of anonymity, said, “The MDs who served during the period of corruption will be sent on leave temporarily, enabling international audit organisations to work impartially through the central bank.”

This decision was reportedly taken on the recommendation of the Banking Task Force, formed to drive reforms in the sector.