S Alam Group Took Tk 180 Billion from Union Bank

S Alam Group has taken Tk 180 billion in loans from Union Bank, accounting for 64% of the bank’s total loan portfolio, according to a Bangladesh Bank audit. The group allegedly used fictitious transactions and bypassed collateral requirements to secure these loans.

Despite reporting to the central bank that less than 4% of its loans are in default, internal documents reveal that around 42% of the bank’s loans are non-performing. In response, Bangladesh Bank has reconstituted Union Bank’s board, appointing five independent directors, though the influence of S Alam Group remains significant.

Reliable sources indicate that critical loan and transaction data, including those related to S Alam Group, have been removed from the bank’s automated system, making it difficult to assess the bank's true financial condition. ABM Mokammel Hoque Chowdhury, Union Bank’s managing director since 2020, is reported to be closely aligned with S Alam Group. Previously, Chowdhury held a position at First Security Islami Bank, also controlled by S Alam.

S Alam’s network of influence extends further, with family members involved in multiple banks, raising concerns of widespread financial irregularities. Experts, including former Bangladesh Bank chief economist Mustafa K Mujeri, suggest that restructuring alone will not remedy the situation. He proposes mergers, capital infusions, and restrictions on foreign travel for top officials to hold those responsible accountable.

Union Bank, established in 2012 with political backing, is facing a severe liquidity crisis, with many branches halting cash transactions. The central bank has frozen S Alam Group’s assets and is investigating the full extent of their involvement in the bank’s affairs. Farid Uddin Ahmed, the newly appointed chairman, acknowledged the crisis, urging Bangladesh Bank for liquidity support.