The attempt to rescue IFIC Bank from years of financial scams, fraudulent lending and breach of regulations appears to have stumbled at the hands of those entrusted with the turnaround.
After the political change in 2024, Bangladesh Bank replaced a board accused of operating under the influence of controversial businessman Salman F Rahman, aiming to restore governance and accountability.
But investigations reveal that the new leadership appointed to clean up the bank has itself come under scrutiny over allegations of financial benefits, policy violations and overstepping administrative boundaries.
Separate probes by Bangladesh Bank, internal reviews of IFIC Bank, board meeting records, payment vouchers, video evidence and a TIMES of Bangladesh investigation find that the reform initiative intended to end past malpractices has failed.
On 15 September 2024, Bangladesh Bank appointed the board comprising former bankers and professionals, naming former banker Md Mehmood Husain as chairman in an effort to give the bank a fresh start.
However, a Bangladesh Bank investigation later found that the current chairman and board members were receiving undue financial benefits while also violating regulatory policies and exceeding their administrative roles. The report recommended regulatory actions against them.
One key concern was the payment of additional financial benefits to board members. Under banking regulations, a director can receive meeting allowances for a maximum of six board and executive committee meetings, one audit committee meeting and one risk management committee meeting. The maximum permitted allowance is Tk10,000 for each meeting.
However, according to the investigation report, board meeting minutes and payment vouchers obtained by TIMES, several additional meetings were arranged in the name of interview boards and inquiry committees for appointing an additional managing director, deputy managing directors, chief credit risk officer and head of internal control and compliance.
Documents show directors received around Tk6.40 lakh through these additional meetings.
The allegations also extend to recruitment decisions. Bangladesh Bank found that several recruitment processes did not fully comply with IFIC Bank’s policies on qualifications, experience, age limits and procedures. In some cases, candidates lacked required experience, official release documents or academic qualifications.
The investigation also raised concerns over the chairman’s involvement in operational matters.
According to Bangladesh Bank’s corporate governance guidelines, a bank chairman or director cannot exercise executive powers individually or interfere in daily operations. However, the investigation report said the current board repeatedly crossed these boundaries.
The report said Chairman Md Mehmood Husain was present at IFIC Bank’s head office on 22 out of 38 working days during March and April 2026. During that period, he met representatives of several major borrowers, including Meghna Corporation, Silver Group, Flamy Fashion and Mars Poly and Accessories.
Bangladesh Bank investigators said such direct involvement could weaken the separation between the board and management and raise questions over future loan restructuring, rescheduling and recovery decisions.
The key question now is what action Bangladesh Bank will take to implement the findings and recommendations.
Bangladesh Bank spokesperson Arief Hossain Khan told TIMES that the Banking Supervision Department had made recommendations based on its probe, while the Banking Regulation and Policy Department would decide the next course of action.
IFIC Bank chairman has not commented on the findings of the investigations. However, the bank, in a written statement, claimed that the chairman did not participate in daily operations.
It said he only attended some customer meetings with senior management officials to speed up loan recovery efforts. The bank also said all recruitments followed its policies and meeting allowances were paid according to existing rules.
Meanwhile, a new contest over control of the bank has emerged. Documents obtained by TIMES show former chairman Lutfar Rahman Badal, who was removed earlier, is seeking to return as a director.
His return bid faces challenges following another Bangladesh Bank probe and two internal reports by IFIC Bank, which alleged that Badal took loans from IFIC Bank using the names of two employees of his own company. TIMES found documents supporting the allegation.
Badal admitted he wanted to return to the board but claimed he was being prevented by misinformation. He questioned the current board’s performance, saying it had not taken visible steps to recover previous undisclosed loans.
Bangladesh Bank spokesperson Arief Hossain Khan said anyone seeking to join a bank board must undergo proper scrutiny and obtain regulatory approval.
IFIC Bank, founded in 1976 as a joint venture between the government and private sector, became fully privately controlled in 1983. The government currently owns 32.75 percent shares of the bank.
