Published: 07:28 AM, 08 June 2026
Al Arafah Islami Bank Is Becoming Another People's Leasing, Fear Depositors
Allegations of gross mismanagement and regulatory breaches have surfaced very recently about the Board of Directors in Al Arafah Islami Bank PLC. This bank, which was once upon a time a profitable institution, has now become a losing concern, financial sources have informed.
Insiders have voiced grim charges of moral degeneration about Al Arafah Islami Bank high-ups. Reports categorically signify that the bank's Independent Directors abused power by paying loans and realigning defaulted credits over and over again after the fall of the ousted regime. A state of panic is prevailing among this bank's customers about the funds they have deposited. Nepotism in staff promotion and salary payment has also emerged as major noncompliance in this bank.
News coverage shows that the bank's Executive Committee Chairman Abdul Wadud was sued by a female colleague for sexual harassment in 2019 who is currently holding a superior post. Reportedly Al Arafah Islami Bank pays loans to general clients and small and medium entrepreneurs with authentic track record with 15% interest rate while disbursing loans to some so-called business firms having no transparent foothold owned by its directors with only 7% interest rate which opposes banking regulations and it is also a barrier for the country's industrial growth. This bank has also conducted mysterious investments in many financial firms which makes this bank comparable to much-discussed PK Halder's company People's Leasing.
It has been observed with alarm that the share prices of Al Arafah Islami Bank in stock markets have plummeted down drastically which has immersed people in worries about their invested funds. A letter issued by Al Arafah Islami Bank dated 15.04.2025 shows that this bank rescheduled defaulted loans by its preferable clients with obscure background which increases risk of making this bank similar to another few banks which suffered extreme capital deficit and liquidity crisis leading to absolute business failure during last few years compared to some Shariah-based banks heavily affected with financial doldrums and disastrous downfall. In this situation fears have gripped the bank's depositors about the safety of their hard-earned money.
Allegedly PK Halder's Hal Travels has held transactions with Al Arafah Islami Bank in the past years. Many other forms of disorder in management are also going on in the bank-several bank officials have told journalists on condition of anonymity. The bank's Board of Directors unjustly interfered in the recruitment process of officials under its Chairman Khwaja Shahriar. A letter from Bangladesh Bank dated 01 June 2026 bearing reference number IBRPD/06(3)/2026-707 shows that the central bank wrote to Al Arafah Bank Managing Director about severe violations of regulatory codes in the recruitment procedure of the bank. Bangladesh Bank also accused Al Arafah Bank of providing misinformation to the central bank and instructed the bank top management to explain the issues within 7 (seven) working days but still Al Arafah Bank authorities are not cautious about fixing up the irregularities in their financial institution.
Allegedly Al Arafah Islami Bank's top officials including Chairman Khwaja Shahriar, Directors Shahinul Haque and Ashraful Hasan, Managing Director Rafat Ullah and Deputy Managing Director Mohammad Hossain appointed unfit officials in higher posts, committed a lot of anarchy in loan distribution and plunged the bank into financial predicaments during last couple of years.
Allegations show that Khwaja Shahriar is making attempts to cover up his involvement in corruption by means of keeping in constant touch with a few unscrupulous Bangladesh Bank officials. Moreover, reliable sources have stated that these anomalies have subjected the Al Arafah Islami Bank clients and shareholders to a huge margin of financial losses.
Under these circumstances the regulatory administrators should go for quick actions to scrutinize the astounding complaints that have emerged about Al Arafah Islami Bank and to ensure accountability of the Board of Directors and safety of depositors' money.
Former Adviser to caretaker government Dr. Hossain Zillur Rahman said "The banking sector in Bangladesh suffered most during last several years from corruption and anomalies. Many banks have become financially paralyzed due to unethical activities of their directors. Undue political intervention also crippled a lot of banks in our country. Right now it is the first and foremost job of Bangladesh Bank and Finance Ministry to dig deeper into banking system allegations without delay. Otherwise the country's financial administration will face dire catastrophes".
Dr. Debapriya Bhattacharya, Distinguished Fellow of Center for Policy Dialogue (CPD) said "All banks are under obligation to follow directives from the central bank so that general accountholders don't face financial damage. It's an ethical duty of bank directors to look after their clients' deposited money. We have seen a great deal of regulatory violations in banks during the past years which jeopardize the deposits of ordinary people. The regulatory institutions should crack down hard on banks which do not comply with rules. Good governance and integrity in the financial sector cannot be established without rectifying dysfunctional banks."
Professor Dr. Mainul Ahsan, Economics Department in University of Chittagong said "The safety of depositors' money comes first for all banks. Strong actions need to be taken if banks are found working against the betterment of their clients. Mismanagement and irresponsible behaviour of bank directors should not be allowed by regulators".
