As trust issues are plaguing Shariah-based Islami banks thanks to allegations of irregularities in lending, Bangladesh Bank has instructed five such banks to send daily updates on loan disbursements and collections of Tk10 crore and/or higher.
The central bank Bangladesh Bank has taken this decision as part of its hands-on supervision.
The banks are Islami Bank Bangladesh Ltd (IBBL), Social Islami Bank (SIBL), First Security Islami Bank (FSIBL), Global Islami Bank and Union Bank.
Governor Abdur Rouf Talukder issued a set of instructions in a meeting on Thursday with all the observers and coordinators appointed to the banks in the country.
Regarding such strict instructions came from the central bank Bangladesh Bank spokesperson Mazbaul Haque said the central bank regularly asks for information from the banks.
He said the directives to the five Islami banks — brought under monitoring following anomalies in their loan disbursements — was part of the central bank’s routine tasks.
Besides, the central bank also asked Social Islami Bank and Global Islami Bank not to disburse loans of Tk50 crore and above.
Regarding the matter, Zafar Alam managing director of Social Islami Bank Ltd said: “We will proceed in accordance with the central bank instruction. Besides, we will now focus on giving small loans to SMEs. The default rate of these loans is very low and the recovery is also good.”
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