Alleged militant link puts Islami Bank in hot water
Bdnl.net : Established in 1983 for promoting Islamic banking in this country, Islami Bank Bangladesh Limited is now in hot water for its alleged link with terror financing and other activities, which are contradictory to the basic principle of the Bank.
Allegations and subsequent inquiries made evident the Bank’s involvement with suspicious businesses other than the banking services in line with what is prescribe by Islam.
Allegations of terror financing against the Bank and its sister concern Islami Bank Foundation surfaced during the tenure of the BNP-led four-party alliance government.
Intelligence agencies at the time found that JMB Amir Sheikh Abdur Rahman and Siddikur Rahman alias Bangla Bhai opened three accounts in Bogra, Naogaon and Jamalpur branches of Islami Bank mainly to send money abroad for terror financing.
During the tenure of the interim government, a task force began more intensive investigation into the allegation against Islami Bank and Islami Bank Foundation, unearthing some strong evidences of militant financing by the Bank and the Foundation.
The investigation also found Islami Bank received interests from different businesses and injected the money to the Foundation, which is a clear contradiction to its Islami banking principle.
The Bank, as it announces on its website, is committed to conduct all banking and investment activities on the basis of interest-free profit-loss sharing system. But a Bangladesh Bank (BB) inquiry team recently found that the Islami Bank transfer a huge amount of money to the Foundation, which is earned as profit and is not considered as ‘halal’ [approved by Shari’a]
The BB conducted a separate inquiry into the allegations of militant financing after the present government took power. It found suspicious activities in the Foundation’s micro credit program.
The state minister for home affairs early last year raised the issue at a press briefing alleging that the Islami Bank Foundation got financial assistance from Islami Bank Hospital, Community Hospital (Rajsahi), Islami Medical College and Jamaat-run schools and colleges and from Zakaat.
The Islami Bank refuted the allegation, but the central bank on November 14 last year appointed an observer to the Islami Bank to identify any suspicious transactions and activities of its Foundation.
The BB earlier on November 8 banned any fund transfer from Islami Bank to the Islami Bank foundation for its alleged lack of transparency in the transaction and violation of Islamic Shari’a.
The central bank also started another investigation into the allegation against Islami Bank that the Bank misused huge amount of money, collected from the members of public as Zakaat.
The central bank received the complaint from the Zakaat Board on December 15 against the Islami Bank for its alleged misuse of Zakaat fund.
In a letter to the BB governor, the Board said it is entitled to collect Zakaat through an account under the name of ‘Government Zakaat Fund’. But the Islami Bank opened a similar account in the name of ‘Islami Bank Foundation’ to collect Zakaat.
The Board said the matter was referred to an expert committee of the Islami Foundation for comment and the committee observed that operation of such account by Islami Bank was a violation of banking act.
The committee also observed that the Islami Foundation has been spending money from the Zakaat Fund in many projects and activities those are not supported by Islamic Shariah.
Referring to the opinion of the expert committee, the Board in the letter mentioned that the Islami Bank Foundation had been spending Zakaat fund to run different activities at their own choice instead of following the criteria, set in Holy Qura’n, for distributing and spending Zakaat.
The Board advised for taking initiative to stop such activities by the Islami Bank and take back the huge amount of money, collected through the Islami Bank Foundation account, which is legally belongs to the government Zakaat fund.
Islami Bank Foundation was also found operating an unauthorized micro-credit programme during a Bangladesh Bank investigation in May this year.
Any micro-finance institution or non-government organisation has to obtain permission from the Micro-credit Regulatory Authority (MRA) to run the credit programme. Islami Bank Foundation is yet to get any MRA licence.
According to MRA Act, 2006, organisations will face maximum Taka 5 lakh fine or one year in jail or the both if found running unlicensed micro-credit activities.
Chairperson of Islami Bank Abu Naser Md Abdus Jaher, however, denied the allegations and claimed that the bank had no links with militancy.
Managing Director of the Bank Md. Abdul Mannan admitted that the Foundation got some benefits through financial transactions, but denied any knowledge of links with militant organizations. He said the income was in compliance with the Shari’a.
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