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What happened to Arastoo Khan?

  • Published at 04:02 pm April 18th, 2018
  • Last updated at 06:28 pm April 18th, 2018
What happened to Arastoo Khan?
The chairman of the board of directors at Islami Bank Bangladesh Limited (IBBL) Arastoo Khan stepped down from his post on Tuesday. When contacted, Arastoo Khan said he stepped down from the chairman post of IBBL on personal grounds as he wants to spend more time with his family. “It was tough for me to give time to my family because of the heavy workload at the bank,” he said. However, sources at the IBBL said that Arastoo Khan did not resign but was forcibly removed by the board just 15 months into what was supposed to be a three year term. A director at the bank seeking anonymity told the Dhaka Tribune: “The bank is out of fresh money to lend. The crisis is so deep that the bank failed to sanction a loan proposal for Tk800 crore sought by one of the most influential shareholders of the bank.” He added that this was the reason why Arastoo Khan was removed.

Facts supporting that he was 'removed'

Arastoo Khan was appointed as the chairman of the IBBL on January 5 last year at a board meeting of the bank immediately after the removal of the then chairman Mostafa Anwar. Earlier, Arastoo Khan served as the chairman of Bangladesh Commerce Bank Limited. He was a former Planning Commission member, and was an additional secretary at the Economic Relations Division, under the Ministry Finance. Arastoo Khan also worked as director of several government and private banks, including IFIC Bank Limited, Karmasangstan Bank, and Agrani Bank. A series of controversies followed including irregularities in appointments, and in the granting of loans, three months after Arastoo Khan took charge of the IBBL. During the first three months of 2017, the bank disbursed over Tk1,400 crore in loans, and most of the loans were sanctioned by breaching relevant rules and regulations, according to a central bank report. In Arastoo Khan’s first three months, around 150 people were appointed to different departments, including 35 to the IT department alone. At the time, directors of the bank at claimed to the Dhaka Tribune that each of the appointments violated regulations and most of them were only made in exchange for bribes. As Prof Syed Ahsanul Alam, the then vice-chairman at the bank did not agree with Arastoo Khan’s activities, he (Ahsanul) was forced to step down from his position on May 23 last year. Sources within the bank claimed that Ahsanul’s removal was a result of his stance against Arastoo Khan’s activities. Contacted, Ahsanul Alam told the Dhaka Tribune: “Nobody is indispensable. Neither is Arastoo Khan. He has no capacity to chair the board of directors at a big bank such as IBBL. “He was just running the bank depending on an anti-government vested quarter. As a result, non-performing loans at the bank rose and the bank has crossed the ADR limit and is at 92%. So, the directors have taken the right decision to save the bank.” When Arastoo Khan joined the bank as chairman, the bank’s deposits were over Tk80,000 crore, but have dropped to around Tk76,000 crore now. The bank has disbursed total credit of around Tk67,000 crore and the bank has capital of just Tk6,000 crore. According to a Bangladesh Bank source, the bank has crossed the permissible limit of 90% advance-deposit ratio (ADR) set by the central bank, and its ADR is above 92% now. According to sources at IBBL, due to the liquidity crisis, the bank failed to give out large-scale loans.
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