Union Bank has reportedly lent Tk 18,000 crore to S. Alam, constituting 64% of the bank’s total loans, through fictitious transactions without adequate collateral. A central bank inspection revealed that 42% of the bank’s total loans have turned non-performing, despite the bank claiming less than 4% in bad loans. Following financial mismanagement, the bank’s board was restructured a month ago, but the influence of the group remains strong, hindering transparency. The central bank has sought detailed loan and deposit information from Union Bank, which has been obstructed by the bank’s management. An internal report indicated that as of August 31, the bank’s total loans amounted to Tk 27,767 crore, with Tk 11,578 crore classified as non-performing, including Tk 9,262 crore deemed irrecoverable. Furthermore, Tk 428 crore was raised through an IPO in January 2022, but the bank’s shares are now valued at Tk 7, down from a face value of Tk 10. The bank currently faces a liquidity crisis, with many branches halting cash transactions and lacking operational initiatives from the newly appointed board.
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