B Mirror Report : Serious concerns regarding corporate governance have been raised at Pubali Bank, one of the nation’s oldest private institutions listed on the stock market, due to a long-standing power struggle within the board of directors, disdain for court rulings and regulatory directives, an unaltered board structure, and frequent irregularities in foreign exchange and loan disbursement. The bank is headed toward a structural catastrophe due to an imbalance of power at the board level and the lack of meaningful punitive measures, even though documented investigations have shown proof of serious misbehavior.
A partial investigation by the Financial Integrity and Customer Services Department (FICSD) of Bangladesh Bank found that several branches of the bank charged amounts far higher than the prescribed market rates when settling import letters of credit (LCs). Under regulations, this excess amount should have been credited to the bank’s own income account. However, in violation of banking laws and foreign exchange control regulations, the money was instead transferred directly into the accounts of certain specific customers.
One specific case revealed by the investigation shows that in January 2024, a company named Mohammadi Electric Wire and Multi Products Limited opened an import LC worth USD 223,000 at the bank’s Barishal Bazar Road branch. At the time of settling the LC liability, the bank charged the customer approximately BDT 6.5 more per dollar than the prevailing market rate.
As a result, around BDT 1.45 million in excess funds collected was not deposited into the bank’s treasury; instead, on the same day, it was credited to the account of Rifat Garments Limited, a customer of the Motijheel Corporate Branch. It is noteworthy that Rifat Garments is an affiliate of the Ha-Meem Group, and Abdur Razzak Mondol, a representative of the group, serves as a director on Pubali Bank’s board.
A similar pattern of fraud was also found at the bank’s Sylhet branch, where excess collections totaling BDT 880,000 from four import LCs of Messrs Hasan and Brothers were likewise deposited into the current account of Rifat Garments.
The FICSD report states that the investigation found evidence of excess charges ranging from BDT 6.5 to 8 per dollar in various cases. To probe these prolonged irregularities and allegations of abuse of power at the top level, the Anti-Corruption Commission (ACC) and the Bangladesh Financial Intelligence Unit (BFIU) have already launched investigations. Essentially, weak oversight at the board level and collusion by top management have plunged this historic private bank into a deep crisis.
