Written by The Banking Post
Bangladesh Bank has raised concerns over the prolonged tenure of former senior secretary Asadul Islam as chairman of Sonali Bangladesh (UK) Limited, a foreign subsidiary of state-owned Sonali Bank, in what appears to be a breach of government rules.
In a recent letter to the Financial Institutions Division (FID) of the finance ministry, the central bank pointed out that Asadul continued as chairman even after retiring from government service on 27 August 2021. This, it said, violates a 2017 finance ministry circular that makes such posts “immediately vacant” upon a government official’s retirement.
Confirming the irregularity, Sonali Bank Chairman Mohammed Muslim Chowdhury said: “There has been a legal deviation in Asadul’s chairmanship of Sonali Bangladesh (UK) Limited. The Bangladesh Bank has sent a letter, so now the matter rests with the FID.”
Licence Revoked, Subsidiary Restructured
Sonali Bank’s UK operations have had a troubled history. Its former subsidiary, Sonali Bank (UK) Limited, lost its licence on 16 August 2022 following long-standing losses and irregularities. On the same day, a new entity, Sonali Bangladesh (UK) Limited, was registered with Companies House as a financial institution and trade entity, with a paid-up capital of £61.46 million (over Tk 1,000 crore).
The new company primarily handles LC bill advisory, negotiation, confirmation, and discounting facilities for Sonali Bank PLC and other Bangladeshi banks, alongside facilitating foreign remittances from UK-based expatriates.
Tough Market for Bangladeshi Banks in UK
Despite rising remittances from the UK and US in recent years, Bangladeshi banks’ exchange houses in Britain continue to struggle. Since 2010, more than a dozen local banks have tried to establish money exchange businesses in the UK, but six—including Prime Bank, Pubali Bank, AB Bank, BRAC Bank, and Mutual Trust Bank—have already shut their operations.
Currently, only seven Bangladeshi bank-owned exchange houses remain, operated by Sonali Bank, Bank Asia, BRAC Bank, Standard Bank, Exim Bank, IFIC Bank, and Mercantile Bank. Most, however, are running at a continuous loss, according to industry insiders.
