Pubali Bank Limited, one of Bangladesh’s oldest and most prominent privately owned banks listed on the stock market, is increasingly embroiled in a deepening crisis of corporate governance. What initially appeared to be isolated compliance lapses has now unfolded into a broader pattern of structural weakness, prolonged boardroom infighting, and persistent regulatory defiance. Together, these factors have raised serious concerns about the bank’s transparency, accountability, and long-term institutional credibility.
For several years, the bank’s board of directors has reportedly been divided by internal power struggles, with competing interests shaping decision-making at the highest level. At the same time, court rulings and directives issued by regulatory authorities have allegedly been ignored or implemented selectively, allowing an unchanged board structure to remain in place. These governance shortcomings have coincided with repeated irregularities in foreign exchange dealings and loan-related operations, eroding confidence among shareholders, depositors, and market observers alike.
An interim investigation carried out by Bangladesh Bank’s Financial Integrity and Customer Services Department (FICSD) has shed light on particularly troubling practices in several branches of Pubali Bank. According to the findings, multiple branches charged importers exchange rates substantially higher than the officially prevailing market rate when settling import letters of credit (LCs). Under banking regulations, any excess amount collected in such transactions must be credited to the bank’s own income account. Instead, investigators found that these funds were diverted directly to the accounts of selected customers, in clear violation of banking laws and foreign exchange control regulations.
One of the most striking examples was uncovered at the Barishal Bazar Road branch. In January 2024, Mohammadi Electric Wire and Multi Products Limited opened an import LC valued at USD 223,000. During settlement, the bank charged approximately BDT 6.5 more per US dollar than the market rate, generating an excess amount of around BDT 1.45 million. Rather than being recorded as bank income, the funds were transferred on the same day to a current account held by Rifat Garments Limited at Pubali Bank’s Motijheel corporate branch.
This transaction has drawn intense scrutiny because of the beneficiary’s corporate links. Rifat Garments Limited is an associate of the Ha-Meem Group, one of Bangladesh’s largest industrial conglomerates. Crucially, Abdus Razzak Mondal, a representative of the Ha-Meem Group, serves as an influential director on Pubali Bank’s board. This connection has amplified allegations of conflicts of interest, board-level influence, and abuse of authority.
Similar patterns emerged at the bank’s Sylhet branch, where investigators identified excess collections totalling approximately BDT 880,000 from four import LCs opened by Messrs Hasan and Brothers. These funds were reportedly transferred to the same Rifat Garments account using identical procedures.
The FICSD report documents consistent excess charges ranging from BDT 6.5 to BDT 8 per US dollar across multiple transactions. Analysts argue that such practices could not have persisted without weak internal controls, ineffective board oversight, and possible collusion within senior management. Unless decisive corrective and disciplinary measures are taken, observers warn that Pubali Bank risks long-term damage to its reputation and a further erosion of trust in the country’s banking system.