Safeguarding entrusted property is considered a sacred duty in Islam. The concept of amanah — protecting deposited funds or assigned responsibilities and returning them to their rightful owners — is fundamental to Islamic banking. However, most Shariah-based banks in Bangladesh have been accused of breaching that very trust. Allegations suggest that these banks, through collusion between their boards of directors and management, were involved in widespread irregularities and corruption, with their Shariah boards turning a blind eye.

The Shariah Supervisory Committee, commonly known as the Shariah Board, plays a key role in shaping policies for Islamic banks. Its main duties include ensuring that operations follow Islamic principles, fostering Shariah-compliant banking practices, and preventing violations of Islamic law. Yet, those familiar with the sector say many board members have failed to fulfill their entrusted responsibilities. In several instances, respected members of these boards allegedly participated in irregular practices. Some reportedly collected BDT 50,000 per meeting instead of the approved BDT 5,000.

After the 2024 uprising, Bangladesh’s Shariah-based banks, many already crippled by financial irregularities, saw changes in their boards and management. However, the Shariah boards largely remained intact. In some cases, minor adjustments were made, but experts say they were insufficient.

The government has now initiated the process of merging five troubled Islamic banks—First Security Islami Bank, Social Islami Bank, EXIM Bank, Global Islami Bank, and Union Bank. Even though Islami Bank Bangladesh PLC, a leader among private lenders, is not part of the merger, it too has faced large-scale financial looting. A review of the Shariah boards of these six banks shows that control was concentrated among just ten individuals.

Leading this network is Professor Dr. Gias Uddin Talukder of the Arabic Department at the University of Chittagong (CU), who currently serves as chairman of the Central Shariah Board for Islamic Banks of Bangladesh (CSBIB). He has also held key positions on the Shariah boards of all Islamic banks under the S Alam Group. Dr. Talukder served as chairman of the Shariah boards of Islami Bank Bangladesh PLC, First Security Islami Bank, and Global Islami Bank, and remains a member of all three boards.

Other influential figures serving on the Shariah boards of the six troubled banks include Mufti Saeed Ahmad Mujaddidi, principal of Jamia-tus Siddiqia Darul Uloom (Madrasah-e-Furfura) in Dhaka; Maulana Obaidullah Hamzah, director general of Al-Jamia Al-Islamia Patiya in Chattogram; Professor Md Mozahidul Islam Chowdhury, principal of Chattogram Government College; Dr. Mohammad Manzur E Elahi of the National University; Dr. Mohammad Abdus Samad; Maulana Mohiuddin Rabbani, principal of Jamia Islamia Markazul Uloom in Savar; Dr. Muhammad Saifullah of Hamdard University; Mufti Mohammad Muhibbullahil Baki, senior imam of the national mosque Baitul Mukarram; and Dr. Abu Noman Md Rafiqur Rahman, chairman of the Department of Islamic Studies at Bangladesh Islami University (BIU) in Dhaka.

Experts say members of Shariah boards must also be held accountable for the collapse of Islamic banks; otherwise similar irregularities and corruption could recur. Shariah board members, however, disagree. They maintain that the boards do not have such powers, and that they can only issue “fatwas” based on the information management provides.

Asked about the issue, Dr. Gias Uddin Talukder, chairman of CSBIB, told Bonik Barta, “The Shariah board is not the Anti-Corruption Commission or an investigative agency. This committee has no such powers. When we are asked for a fatwa on a matter, we give a fatwa only on that matter. We do not have information on whom the bank invests with or from whom it takes deposits. We only know what the management tells us. If the management conceals information and asks for a fatwa, there is nothing we can do.”

By contrast, M Kabir Hassan, professor of finance at the University of New Orleans and an expert on Shariah-based banking, says Shariah board members must share responsibility for the sector’s collapse. Speaking to Bonik Barta, he said, “In Islam, safeguarding trust is taken extremely seriously. Embezzling entrusted funds cannot be justified. Shariah board members are widely respected as scholars in society, and their personal credibility matters in mobilizing deposits. The Shariah board’s duty is not merely to issue halal–haram rulings on specific issues. They also bear responsibility for protecting the public’s deposited funds.”

Professor Hassan added that Shariah board members failed to uphold their duty. “They could not protect the public’s deposits, and for that they must face accountability in the afterlife,” he said. “But it is not acceptable that worldly justice would be absent. A small number of people have controlled the Shariah boards of Islamic banks for generations. They have formed a powerful syndicate. To preserve their dominance, syndicate members block young Shariah scholars with modern banking knowledge from joining boards. Alongside punishments for the boards of directors and management, Shariah board members must also be held accountable.”

After Sheikh Hasina’s government was ousted in August 2024, Dr. Ahsan H Mansur, as the new central bank governor, has dissolved the boards of 15 private banks so far. Among them, five Shariah-based banks underwent asset quality reviews (AQR) conducted by internationally recognized audit firms. The audits, carried out by Ernst & Young and KPMG, were completed in May 2025.

According to the AQR findings, the five banks held deposits totaling BDT 1.58 trillion, while their distributed loans, or investments, amounted to BDT 1.91 trillion. Of that, BDT 1.46 trillion, about 76.69 percent, was classified as nonperforming (NPL). The audits also revealed a combined shortfall of BDT 745.01 billion for these banks.

Data show that Union Bank had the worst default rate, with 97.80 percent of its loans classified as nonperforming. The figure stood at 96.37 percent for First Security Islami Bank and 95.10 percent for Global Islami Bank. In comparison, EXIM Bank’s default rate was 48.20 percent, and Social Islami Bank Limited’s (SIBL) was 62.30 percent.

Outside the merger process, Islami Bank Bangladesh PLC had BDT 680 billion in defaulted loans, or 42 percent of its total lending. Altogether, the six Shariah-based banks now hold BDT 2.14 trillion in nonperforming loans.

Dr. Gias Uddin Talukder joined Islami Bank’s Shariah board in 2017, shortly after the S Alam Group took control of the institution. From 2020 to 2023, he served as the board’s chairman—a period marked by widespread irregularities and large-scale fund misappropriation at the country’s largest private bank.

S Alam himself had been chairman of First Security Islami Bank for more than 15 years, during which Talukder also chaired that bank’s Shariah board. He simultaneously served as chairman of the Shariah board of Global Islami Bank, another S Alam-controlled entity, and was also a member of the Bangladesh Bank’s Shariah Advisory Committee.

Responding to the allegations, Dr. Gias Uddin Talukder said, “Under Islamic banking principles, loans cannot be extended to businesses dealing in alcohol, tobacco, or other Shariah-prohibited sectors. Our responsibility as Shariah board members is to issue fatwas when there are doubts about the source of income. We ensure that the bank’s investment and deposit products comply with Shariah principles and that zakat funds are used properly. We have tried to fulfill our assigned duties. Preventing irregularities, corruption, or fund misappropriation is the responsibility of the management and the Bangladesh Bank. They should be the ones answering for how they carried out their duties.”

After S Alam Group took control of Islami Bank, the director general (muhtamim) of Jamia Islamia Patiya madrasa in Chattogram, Maulana Obaidullah Hamzah, became a key figure on the bank’s Shariah board. He was appointed chairman of the board in 2023. Following the 2024 uprising, Islami Bank removed him from the position. Besides Islami Bank, Hamzah also served as chairman of the Shariah board at Social Islami Bank and as a member of the board at First Security Islami Bank under the S Alam Group’s control. Following the uprising, he was removed from the Shariah boards of all these banks.

Mufti Saeed Ahmad Mujaddidi, the head of Jamia-tus Siddiqia Darul Uloom (Madrasa-e-Furfura) in Dhaka, has served as a member of Islami Bank Bangladesh PLC’s Shariah board since 1998. He remained on the board even after the S Alam Group took control. During that time, he also chaired the Shariah board of Al-Arafah Islami Bank and served as vice chairman of the boards at First Security Islami Bank and Global Islami Bank. He was also both chairman and member of the Shariah board at Social Islami Bank. He currently continues to serve as chairman of the Shariah boards at Islami Bank, Al-Arafah Islami Bank, and First Security Islami Bank.

Another influential member of the Shariah boards of the troubled Islamic banks is Dr. Mohammad Abdus Samad. He has served as member-secretary of Islami Bank Bangladesh PLC’s Shariah board since 2016 and first joined the board in 2004. He is also a member of the Shariah boards of Global Islami Bank and Aviva Finance, both previously controlled by S Alam Group. While the group maintained control, he also served on the Shariah board of Social Islami Bank. Dr. Samad is currently the teacher of religious attaché at the Saudi Embassy in Dhaka.

Professor Dr. Mohammad Manzur E Elahi of the National University has served on Islami Bank’s Shariah board since 2007. During the same period, he worked as member-secretary of the Shariah board at Social Islami Bank. He currently serves on the boards of Islami Bank, First Security Islami Bank, and Global Islami Bank. He also advises the Shariah wings of several other conventional banks in the country.

Since 2007, Maulana Mohiuddin Rabbani, principal of Jamia Islamia Markazul Uloom madrasa in Savar, Dhaka, has served as a member of Islami Bank’s Shariah board. He retained his position even after S Alam Group took control of the bank.

Professor Dr. Muhammad Saifullah has been on Islami Bank’s Shariah board since 2017. At the same time, he serves as chairman of the Shariah board at Standard Bank. A faculty member of the private Hamdard University, he is also well known for his appearances on televised religious programs.

Senior Imam of the National Mosque Baitul Mukarram, Mufti Mohammad Muhibbullahil Baki, has also served on Islami Bank Bangladesh PLC’s Shariah board since 2017. He was the member-secretary of the Shariah board at Union Bank and a member of the boards at First Security Islami Bank and Global Islami Bank. Even after the 2024 uprising, he retained his positions on these banks’ boards and continues to serve as a member of the Shariah board at EXIM Bank.

Professor Md Mozahidul Islam Chowdhury, currently principal of Chattogram College, chaired the Shariah board of Union Bank, which is now struggling with a 98 percent default rate. He was also a member of the Shariah boards at Islami Bank Bangladesh PLC and Global Islami Bank. Following the uprising, he was removed from all three boards.

Professor Dr. Abu Noman Md Rafiq Rahman, chairman of the Department of Islamic Studies at Bangladesh Islami University in Dhaka, has long served as chairman of the Shariah board at EXIM Bank. He continues to hold the same position after the uprising. The Shariah-based bank was chaired by businessman Md Nazrul Islam Mazumder, who has been in prison for nearly a year.

Mohammed Nurul Amin, chairman of the restructured board of Global Islami Bank, said that any committee should also bear responsibility for its actions. “The Shariah Supervisory Committee is an integral part of Islamic banks,” he told Bonik Barta. “It plays a role in policy decisions, and its members receive remuneration. So why should they not be held accountable? The committee must also share responsibility for the irregularities and corruption that took place in these banks. After the board was restructured, we replaced several members of the Shariah committee.”

Multiple senior executives and officials from various banks who have worked with Shariah boards over the past decade told Bonik Barta that the controversial role of some board members encouraged management and boards of directors to engage in irregularities and corruption. Under the law, each member receives a remuneration of 5,000 to 7,000 BDT for attending meetings. However, some members were reportedly paid 50,000 BDT per meeting. These payments were disguised in the bank’s accounts through fake vouchers. Many board members also intervened in recruitment and procurement. When opinions were sought on controversial investments or loan distributions, the board often provided guidance in a way that ensured the transaction would be approved quickly.

A responsible official associated with Islami Bank’s Shariah board, speaking on condition of anonymity, told Bonik Barta, “BDT 2 billion from Islami Bank’s zakat fund was spent on the government’s model mosque construction. Zakat fund can never legally be donated to a mosque. Yet the Shariah board did not object. Later, after the trust crisis began, a deposit product promising double profits over six years was launched, which was clearly against Shariah principles. Even in that case, the Shariah board approved it at the time.”

Arief Hossain Khan, spokesperson and executive director of Bangladesh Bank, said that the Shariah board members bear responsibility for approving such Shariah-violating activities. “Not all accountability is defined by law or regulations. Some issues are tied to values and ethics. The nation’s respected scholars serve as Shariah board members. If we determine their punishment through law, then the board itself loses its credibility,” he said.

Arief Hossain Khan added, “Based on past bitter experiences, the central bank recently established a Shariah Supervisory Committee and drafted a policy outlining responsibilities. A Shariah committee is also being formed within the Bangladesh Bank to monitor the activities of banks’ Shariah boards. We hope that in the future, the work of Shariah committees can also be brought under oversight and accountability.”