The recent resignation of Sheikh Hasina marks a significant turning point in Bangladesh's political and financial landscape. Under her 16-year rule, the S Alam Group enjoyed significant government patronage, allowing it to exert considerable influence over the country's financial institutions, most notably Islami Bank. The conglomerate's control over the banking sector, facilitated by its close ties to the Awami League government, has led to widespread allegations of financial misconduct, regulatory breaches, and political manipulation. With the resignation of Hasina, there is now a renewed focus on holding those who benefited from such patronage accountable, as evidenced by the recent actions of Bangladesh Bank and the Anti-Corruption Commission (ACC).
S Alam Group, founded in 1985 by Mohammad Saiful Alam, has grown into one of the largest and most powerful conglomerates in Bangladesh. The group’s rise was closely linked to its political connections, which it leveraged to gain control over key financial institutions, including Islami Bank, Janata Bank, and several other banks.
Between 2017 and June 2024, S Alam Group and its associate companies took out Tk 95,331 crore from six banks, with 79 percent of this amount coming from Islami Bank alone. This sum is equivalent to 5.78 percent of the entire banking sector's total outstanding loans as of March, highlighting the sheer scale of the group's influence.
Documents obtained by The Daily Star reveal that most of these loans were secured by bypassing standard banking rules and regulations. The financial misconduct pattern served as evidence of S Alam Group's dominance in the banking sector, made possible by the support they received from the political climate at the time. The extent of this influence is particularly evident in the operations of Islami Bank, where S Alam Group held controlling stakes and appointed its loyalists to key positions within the bank.
One striking example of the group's manipulative practices involves a modest corrugated tin seller, Murad Enterprise, which was given Tk 890 crore within a month of opening an account with Islami Bank's Chaktai branch in Chattogram. The bank did not verify the need for the funds or the company’s financial capacity to repay the loan. A year later, another loan of Tk 110 crore was given to the same company, which was later revealed to be a shadow entity controlled by S Alam Group. The bank took minimal collateral from Murad Enterprise, further underscoring the irregularities in the loan approval process.
The scale of S Alam Group’s financial dealings with Islami Bank is staggering. Of the Tk 95,331 crore taken from six banks, Tk 74,900 crore was secured from Islami Bank alone. This amount was divided between the group’s subsidiaries, which borrowed Tk 26,000 crore, and 29 associate companies, such as Nabil Group, Desh Bandhu Group, Unitex Group, and Anantex Group, which borrowed the remaining Tk 48,900 crore.
The bank's Khatunganj branch in Chattogram was particularly noteworthy, with Tk 35,924 crore being taken through just ten companies. Additional loans totaling Tk 29,575 crore were secured by S Alam Group’s shadow companies, including Nabil Foods, Nabil Auto Rice Mills, MS AJ Trade International, and Anowara Trade International, from the Rajshahi branch of Islami Bank.
Beyond Islami Bank, S Alam Group’s influence extended to other major financial institutions, including Janata Bank, Social Islami Bank (SIBL), Union Bank, Global Islami Bank (GIB), and First Security Islami Bank (FSIBL). The group and its affiliates took out Tk 13,400 crore from Janata Bank alone. Alarmingly, about Tk 10,449.45 crore of this amount was secured by S Alam’s subsidiaries, with nearly 90 percent of these loans being funneled through Janata's Sadharan Bima Corporate Branch in Chattogram. The remaining Tk 2,950.55 crore was taken by the group’s associate companies.
The lending practices at Janata Bank were grossly irregular, with the bank repeatedly breaching its single borrower exposure limit to accommodate S Alam Group’s loan requests. According to banking law, a bank is prohibited from lending more than 25 percent of its paid-up capital to a single entity. However, by the end of June 2024, Janata Bank’s paid-up capital stood at Tk 2,314 crore, yet the bank’s loans to S Alam Group far exceeded this limit, posing significant risks to the bank's financial health.
S Alam Group’s exploitation of other banks further illustrates the extent of its influence. The group secured Tk 4,200 crore from Social Islami Bank (SIBL), where the chairman, Belal Ahmed, is Alam’s son-in-law, and five more of Alam's relatives hold board positions. Additionally, Tk 2,000 crore was taken from Union Bank, where Alam’s siblings and their relatives are board beyondmembers. The group also took out Tk 574 crore from Global Islami Bank (GIB), whose vice-chairman is Alam’s daughter Maimuna Khanam, and Tk 257 crore from First Security Islami Bank (FSIBL), where Alam himself serves as chairman.
In light of these gross irregularities, the Bangladesh Bank recently restricted the lending activities of these banks, save for Janata Bank, signaling a crackdown on the financial mismanagement that has plagued the sector. This move, along with the dissolution of Islami Bank’s board, marks a significant shift in the country’s approach to tackling corruption in the banking sector. The ACC’s decision to reopen its investigation into Saiful Alam and S Alam Group’s alleged money laundering activities further underscores the seriousness with which these issues are now being addressed.
The allegations against Saiful Alam include the creation of a $1 billion empire in Singapore, raising significant questions about the sources of his wealth and the legality of his financial dealings. The ACC’s investigation, if conducted thoroughly and transparently, could play a key role in restoring public confidence in Bangladesh’s financial institutions, which have been severely undermined by the actions of S Alam Group and the political environment that allowed such actions to occur.
Recovering the funds siphoned off by S Alam Group will be a challenging task, but it is essential for restoring the financial health of the affected banks. Legal experts have called for the seizure of assets linked to the group, and the ACC’s investigation could pave the way for such actions.
However, the complexity of these financial transactions and the potential involvement of international assets make this a daunting prospect. Nonetheless, aggressive legal action against those responsible is necessary to send a clear message that financial crimes will not be tolerated.
Beyond the immediate task of recovering funds, there is a need for broader legal and regulatory reforms to prevent similar situations from arising in the future.
Political forces' role in Islami Bank takeover emphasizes the importance of legal boundaries for protecting financial institutions. This includes stricter penalties for financial crimes, enhanced protections for whistleblowers, and greater transparency in the ownership and operations of banks.
Promoting ethical governance within financial institutions is another critical area of focus. The appointment of independent directors and the enforcement of governance standards can help ensure that banks are managed in the best interests of their depositors and shareholders. Moreover, banks must be required to disclose detailed information about their ownership structures, financial transactions, and loan practices to ensure greater transparency and accountability.
The dissolution of Islami Bank’s board and the removal of S Alam Group’s influence are positive steps, but they are only the beginning of what must be a comprehensive effort to rebuild the integrity of Bangladesh’s financial sector. The road ahead will be challenging, as the country grapples with the fallout from these scandals and works to restore confidence in its institutions.
As Bangladesh moves forward, the lessons from the S Alam Group scandal must not be forgotten. The intersection of corporate power and political influence has proven to be a toxic combination, one that has brought some of the country’s most respected institutions to the brink of collapse. Addressing these issues requires not only strong regulatory oversight but also a commitment to ethical leadership and the rule of law.
For those who have watched the rise and fall of S Alam Group’s influence over Bangladesh’s financial sector, there is a sense of both relief and apprehension. Relief that the group’s stranglehold on key institutions is finally being broken, but apprehension about what comes next.
The challenges facing Bangladesh’s financial sector are immense, and the path to recovery will be long and difficult. However, with the right reforms and a renewed commitment to transparency and accountability, there is hope that the country can emerge from this crisis stronger and more resilient.
The ACC’s investigation into Saiful Alam, coupled with the central bank’s actions against Islami Bank, represents a critical juncture in Bangladesh’s fight against corruption. These efforts must be supported by all stakeholders, from government officials to civil society, to ensure that they lead to meaningful change. The future of Bangladesh’s financial sector depends on it.
As we look to the future, it is clear that the fight against corruption in Bangladesh’s financial sector is far from over. The dissolution of Islami Bank’s board is a significant victory, but it is only one battle in a much larger war. The true test will be whether these initial victories can be translated into lasting reforms that protect the integrity of Bangladesh’s financial institutions for generations to come. The stakes are high, but so too is the opportunity to create a more just and transparent financial system that serves the needs of all Bangladeshis.
In the end, the story of S Alam Group’s rise and fall is a reminder of the power of accountability and the importance of vigilance in protecting the public good. As Bangladesh continues its journey towards greater transparency and integrity, the lessons learned from this scandal will be invaluable in shaping a brighter, more equitable future for the nation.
