The board of Islami Bank Bangladesh PLC has placed its Managing Director and CEO Mohammad Omar Faruk Khan on one-and-a-half months of compulsory leave, in what insiders describe as a move driven by government instruction.
The decision was taken at a board meeting on Sunday and will take effect from Monday, according to multiple officials familiar with the matter.
A senior bank official, speaking on condition of anonymity, told TIMES the move reflects ongoing political intervention in the lender’s governance.
“The board sent the managing director (MD) on leave following instructions from the government,” the official said, adding that changes in the bank’s leadership have continued since the change in government.
Another board member said the decision followed guidance from Bangladesh Bank, although no formal basis for such instruction was disclosed.
“The MD has been sent on leave in line with the central bank’s direction,” the member told TIMES, without elaborating further.
Under prevailing banking norms, any removal or replacement of a managing director typically requires board approval alongside regulatory consent.
However, officials indicated that in this case, the leave decision was executed following a directive rather than a standard governance process, raising fresh questions about regulatory independence and board autonomy.
The move comes weeks after the central bank reshuffled the bank’s board.
On 16 March, it removed director Abdul Jalil and appointed accountant SM Abdul Hamid in his place, according to officials aware of the development.
Independent directors, however, offered a different account. Islami Bank Independent Director and Executive Committee Chairman Mohammad Khurshid Wahab said the MD had applied for leave and was granted time off until 31 May.
“He sought leave, which has been approved,” he said.
Islami Bank Independent Director and Risk Management Committee Chairman Mohammad Masud Rahman echoed the position. “He requested one-and-a-half months’ leave to travel to the United States for his son’s convocation and for medical treatment. The board approved leave until 31 May,” he told TIMES.
Neither director responded when asked whether the leave could become permanent.
In the absence of the MD, Additional Managing Director Altaf Hossain has been assigned acting charge based on seniority, Masud Rahman confirmed.
Faruk Khan joined the bank in 1986 and was appointed managing director in August last year.
The development comes against a backdrop of prolonged governance concerns at the bank. Between 2017 and August 2024, when the previous government fell, the lender remained under the control of S Alam Group, during which around Tk1.2 lakh crore was allegedly siphoned off through various means, according to investigation findings and regulatory assessments.
The period also saw the recruitment of nearly 10,000 officials without standard examinations, contributing to deep structural stress within the institution.
Following the installation of an interim administration in 2024, the board was reconstituted, while several top executives reportedly left the country.
There is little precedent in Bangladesh’s banking sector for placing the chief executive of the country’s largest Shariah-based lender on extended leave under such circumstances, analysts say, with the latest move likely to intensify scrutiny over governance and regulatory signalling in the sector.
