Listed on the stock market four decades ago, IFIC Bank PLC was established under mixed public-private ownership. The finance ministry holds about 33 percent of its shares. That one-third stake, however, never translated into effective control or authority over the bank, leaving the lender historically vulnerable to alleged systemic plunder by powerful oligarchs.
Irregularities intensified during the uninterrupted 15-year administration of now-ousted Prime Minister Sheikh Hasina. Salman F Rahman, her private industry and investment adviser and head of the Beximco conglomerate, assumed the chairmanship of IFIC Bank in 2010 and maintained effective control until the mass uprising that ousted Hasina from power in 2024. Although Rahman held just 2 percent of the equity, a subsequent Bangladesh Bank inspection revealed he had siphoned more than BDT 145 billion from the lender via 28 shell and shadow companies.
Central bank and IFIC officials confirmed that two or three directors were routinely appointed to the board from the finance ministry by virtue of the state’s shareholding. Those directors consistently failed to challenge the mismanagement, instead colluding in the irregularities in exchange for boardroom perks and employment opportunities for relatives.
With Salman F Rahman now removed, a new faction is attempting to seize control, according to senior IFIC officials. They claimed the bank has been dominated by politically connected interests since the late 1990s, with regime loyalists routinely capturing leadership positions after every change in government. A mere 2 percent stake sufficed for Rahman to run the institution. Today, with the shares trading at just BDT 5, acquiring a similar 2 percent block would cost barely BDT 200 million, an entry threshold an influential group now intends to exploit to control the entire bank.
Following the mass uprising on August 5, 2024, Bangladesh Bank dissolved IFIC’s board and appointed a veteran banker, Md Mehmood Husain, as chairman. Addressing why the state’s one-third stake failed to secure control, Husain noted that while the largest shareholder should normally exercise proportional authority, influential political actors ran the institution instead, treating government nominees as subordinates.
Husain warned that the bank must be extricated from this trap. He added: “Had government-appointed directors in the past acted independently and with integrity, the bank might not have been plundered. The contradiction between the government’s ownership stake and its lack of effective control needs to be resolved. Otherwise, the government could divest its shareholding to the private sector. That would at least spare the government from bearing responsibility for any looting of the bank.”
IFIC Bank currently has over 1.92 billion (1,922,086,647) outstanding shares. Dhaka Stock Exchange data from June 30 show the finance ministry holds 32.75 percent of those shares, with several institutions owning 21.23 percent, retail investors 45.38 percent and foreign investors holding 0.64 percent. The shares closed on Thursday at BDT 5, half their face value of BDT 10. This erosion follows consecutive years of accelerating deficit, with the bank posting a net loss of BDT 1.02 billion in 2024, which swelled to BDT 25.62 billion in 2025.
An audited financial report from 2023 details the ownership structure at the close of that year, when total shares stood at 1,830,558,712. Salman F Rahman held over 36.62 million shares, representing 2 percent of the total. His son, Ahmed Shayan Fazlur Rahman, then serving as vice-chairman of the bank, held 2.11 percent. The three government-nominated directors — Quamrun Naher Ahmed, Md Zafar Iqbal and Md Golam Mostofa — were all additional secretaries. Mostafa remains on the board to this day.
Nazma Mobarek, secretary of the finance ministry’s Financial Institutions Division, declined to comment on why the state’s shareholding had never yielded board control. She said: “The finance ministry nominates directors to the bank’s board. We are working to address the irregularities that weakened the banking sector in the past. Our goal is to ensure the same situation doesn’t arise again in the future.”
The loans generated by institutional fraud are now largely unrecoverable. At the end of December, IFIC’s outstanding loan portfolio stood at BDT 443.29 billion, of which 61.47 percent — BDT 272.5 billion — had deteriorated into non-performing status. The central bank audit linked BDT 145 billion of those soured loans to non-existent companies, identified as Salman F Rahman’s shadow entities, against which the bank holds virtually no collateral. Rahman also brokered loans to other oligarchs that have since defaulted, pushing the non-performing loan ratio even higher.
The bank’s financial statement for the first quarter (January to March) of 2026 underscores the severity of the resulting earnings squeeze. IFIC generated just BDT 3.62 billion in interest income against BDT 11.40 billion paid out to depositors, resulting in a net interest loss of BDT 7.77 billion over the three months and an operating loss of BDT 8.57 billion. On current trends, the full-year net loss will outstrip the BDT 25.62 billion recorded in 2025. The rapid accumulation of bad debt has also prevented adequate provisioning, leaving the bank with a capital shortfall exceeding BDT 47.99 billion at the end of 2025.
Arif Hossain Khan, spokesperson and executive director of Bangladesh Bank, described the irregularities as deeply unfortunate given IFIC’s scale and the government’s substantial equity stake.
Khan confirmed that the central bank intervened to dissolve the board due to severe governance failures. Audits by Bangladesh Bank and independent institutions have documented all structural irregularities, he added, and the regulator is now pursuing punitive action against those responsible while working to restore effective governance to the bank.
IFIC was established in 1976 as the country’s first investment company, a public-private joint venture originally named International Finance Investment and Commerce Limited. Commissioned to project Bangladeshi investment globally, the institution sustained strong early momentum before systemic political interference derailed its mission.
During its tenure as an investment house, IFIC anchored the creation of Bank of Maldives Limited in 1982, launching the island country’s first national bank. The firm supplied 40 percent of the initial equity, assumed full management responsibility and deployed Bangladeshi officials to establish the Maldives’ foundational banking infrastructure. Although IFIC subsequently lost its ownership stake, Bank of Maldives is now widely rated the country’s leading financial institution.
The government reconstituted IFIC as a full scheduled commercial bank on June 24, 1983. Industrialist Jahurul Islam was appointed as its first chairman. International ambitions persisted despite the structural shift. The bank founded the Oman Bangladesh Exchange Company in 1985, opened branches in Karachi and Lahore in 1993, and established Nepal Bangladesh Bank Limited in Nepal in 1994, followed by Nepal Bangladesh Finance and Leasing Company Limited in 1999.
IFIC Bank began losing its strategic direction in the late 1990s as politically influential oligarchs initiated a series of boardroom incursions, with ruling party loyalists routinely capturing the chairmanship. The bank has since faced repeated allegations of share price manipulation on the stock exchange.
Stakeholders describe the bank’s first two decades as a golden age defined by an outward, international focus. The lender subsequently devolved into a provincial domestic operation as its global ambitions collapsed. Since 2009, the institution has been trapped in a cycle of structural irregularities, corruption and systemic asset stripping, culminating in its current heavy financial losses.
Mohammad Muslim Chowdhury, former finance secretary and comptroller and auditor general, termed the government’s failure to command IFIC despite its 33 percent shareholding as deeply regrettable. “The state owns a third of the equity, yet politically connected actors have directed operations for years. That’s an institutional failure,” he said.
Chowdhury added: “With one-third of the shares held by the government, the remaining equity should have been widely dispersed among retail investors. Instead, influential interests acquired large stakes and took control of the bank’s board. They then used that control to siphon funds from the bank through irregularities and corruption. That shouldn’t be allowed. The board needs much tighter oversight. It should also be ensured that key positions, including the chairmanship, remain in the hands of government-appointed representatives.”
Addressing the failure of finance ministry nominees to challenge the mismanagement, the former finance secretary cited the constraints imposed by broader political realities. “The prevailing governance framework ultimately binds government officials,” he said. “When the political leadership extends its blessing to a mafia or an oligarch, civil servants are effectively rendered powerless.”