Premier Bank's funds allegedly inflated rents and paid for ghost floors, with a whooping Tk 220 crore advance going to the Iqbal family's pocket, as unveiled in a recent report.
In a troubling development, Premier Bank, one of the leading financial institutions in Bangladesh, has seen its non-performing loans (NPLs) skyrocket to Tk9,817 crore, accounting for 29% of its total loan portfolio as of March 2025. This substantial advance, significantly higher than the adjusted due advance of Tk159.32 crore as of December 2023, raises concerns about potential breaches of contract or unadjusted previous advances.
Media reports from late 2022 began to surface, suggesting a connection between the bank's leadership or affiliates and potentially irregular financial activities. The focus was on loan fraud at multiple banks, including Premier Bank, where the bank's headquarters were located within properties owned by HBM Iqbal and his family businesses, such as the Iqbal Centre and Premier Square.
The reports indicated issues with loan procedures, with large loans released without proper mortgage formalities, suggesting governance failures and possible collusion with bank officials to facilitate fraudulent loans. Although detailed data on Premier Bank’s NPLs directly linked to these alleged scams remains limited, the context is relevant as it mirrors a pattern of mismanagement suspected at Premier Bank related to HBM Iqbal.
Investigations further uncovered excessive monthly payments made to Iqbal's entities, with Premier Bank reportedly using bank funds as a direct pipeline into his private property business. During HBM Iqbal's tenure as chairman, a pattern of exorbitant payments to family-owned entities emerged, raising serious questions about governance and accountability.
HBM Iqbal, the founding chairman of Premier Bank, is accused of using the bank as a personal ATM for his property and businesses. This money was funnelled into institutions controlled by the Iqbal family, such as the Royal University of Dhaka and Sheikh Hasina University of Science & Technology.
In a recent development, HBM Iqbal and his son Moin Iqbal resigned from their posts on 12 January 2025, citing health reasons. Another son, Imran Iqbal, was appointed the new chairman.
Moreover, the bank's subsidiary, Premier Bank Securities Ltd (PBSL), rents 10,400 square feet at Premier Square in Gulshan, owned by HBM Iqbal's wife. However, an inspection found that PBSL was only using a fraction of this space, with the rest serving as the former chairman's private office, a hotel conference room, and a warehouse.
The bank also reportedly paid nearly Tk27 crore over 42 months until August 2024 for two additional floors (the 20th and 21st) of Iqbal Tower that were non-existent, unfinished, and unusable. Since signing a new contract in 2021, Premier Bank has been overpaying by at least Tk60 crore annually for the Iqbal Centre rent.
The central bank's inspection found only a quarter of the space in use, despite the bank possessing land in Banani where it could have built its own cost-effective storage. Additionally, the bank was found to be paying Tk3.75 crore annually for a poorly utilised 25,000 square foot tin-roofed "central warehouse" in Tejgaon Industrial Area, rented from Vice Chairman Moin Iqbal.
Beyond these financial irregularities, the bank is also under scrutiny for donations exceeding regulations. Despite regulations limiting donations to 1% of annual profit or Tk1 crore, Tk30 crore was donated in 2023 and another Tk5 crore in 2024 without board approval.
As the investigation continues, the public waits for the findings of Bangladesh’s Anti-Corruption Commission, Bangladesh Bank, or investigative journalism sources focusing on Premier Bank and HBM Iqbal’s affiliated businesses to gain a more comprehensive understanding of the situation.
- News regarding potential financial misconduct within the business sector escalated further in 2022, when media outlets started reporting alleged irregularities at Premier Bank, including loan fraud and unjustified payments to various entities owned by HBM Iqbal.
- The financial affairs of Premier Bank, a leading Bangladeshi institution, have come under increased scrutiny due to concerns about improper loans, excessive payments to Iqbal-owned businesses, questionable donations, and the dubious rental of premises from Iqbal family members.
