The board of directors at ICB Islami Bank has been removed. Bangladesh Bank issued a notice letter to the bank informing it of its decision on Wednesday. Orders for Bangladesh Bank stated its board has been dissolved in the interest of depositors’ and bank interest as well as good governance.
The order of the central bank was that due to weaknesses in board of directors and management of ICB Islami Bank, provision and capital shortage have occurred. Besides, the bank’s cumulative losses and classified investments are gigantic. Management turmoil and crisis in liquidity have become intensified. Banking good governance is also obstructed due to policymaking weakness at board level. The board was operating against depositors’ interest. In view of all those grounds, an order has been issued for removal and dissolution of existing board of directors under Bank Companies Act in depositors’ and public interest.
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Meanwhile, another notice issued by Bangladesh Bank read, “For the interest of the depositors and good governance of the bank, Bangladesh Bank Executive Director Mojibur Rahman has been appointed to exercise the powers and discharge the liabilities of the Board of Directors and Managing Director.” ICB Islami bank opened its operation in Bangladesh as far back as 1987. It used to be known as Al-Baraka bank. It became a ‘problem bank’ in 1994. That is when Bangladesh Bank started contemplating despatching observers to the problem banks to instill discipline in bank operations. It reopened its operation as a commercial bank once again in the name of Oriental Bank in 2004.
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Its board of directors was dissolved in June 2006 because of wholesale irregularities. 34 cases in 2006 and 2005 were lodged against its charge of embezzlement of crores of taka from Oriental Bank. Bangladesh Bank later acquired its sole ownership and one of its senior executives was named its administrator in an attempt to protect depositors’ funds.
Bangladesh Bank invited bids for its sale in August 2007 for the majority share of the bank’s ownership. It was renamed ICB Islamic Bank in 2008. Foreign investors bought the ownership of the bank, but the bank could not turnaround due to litigation and old defaulted loans. Bangladesh Bank has taken over its operation and management.
