BB appoints observer at Standard Bank

The Bangladesh Bank (BB) last week appointed an observer at the shariah-based Standard Bank to closely monitor its operations amid alleged internal conflicts between board members.

Md Sharafat Ullah Khan, director of the Payment Systems Department, has been appointed an observer, confirmed BB Executive Director and spokesperson Arief Hossain Khan.

“We have taken this step in view of the current situation at the bank,” he told The Daily Star.

From now on, Khan will attend board meetings and other vital meetings at Standard Bank as part of the central bank’s enhanced supervision.

Following the fall of the previous government, the 16-member board of the private bank has reportedly split into two groups over various issues. One faction is led by the immediate past chairman, Mohammed Abdul Aziz, while the other is steered by his son and former vice-chairman, AKM Abdul Alim.

Amid the disputes, Gulzar Ahmed, a former vice-chairman, was made chairman of the bank on Saturday.

Speaking on condition of anonymity, bank officials said the feud has paralysed decision-making, with board meetings often ending in arguments over staffing and management matters.

Standard Bank began operations on June 3, 1999. In January 2021, it became a full-fledged shariah-based bank after receiving approval from the BB.

Kazi Akram Uddin Ahmed, a businessperson and relative of deposed prime minister Sheikh Hasina, served as the chairman of the bank for years. However, following the political shift, Abdul Aziz assumed the role.

An earlier BB inspection found various irregularities involving the bank’s former chairman, Kazi Akram, and his son, former director Kazi Khurrum Ahmed. These issues contributed to the bank’s financial decline, according to a central bank report.

At the end of September last year, the bank’s defaulted loans stood at Tk 5,884 crore, accounting for 29.14 percent of its total disbursed loans. During the same period in 2024, its classified loans amounted to Tk 1,679 crore, or 8.62 percent of total disbursed loans.