Shariah-based Union Bank terminated 262 employees yesterday, reportedly recruited under directives from Mohammed Saiful Alam, founder of S Alam Group, bypassing proper procedures.

Similarly, First Security Islami Bank withdrew 194 officials, including branch managers and a zonal head, for allegedly facilitating unauthorized loans to Alam through fake entities.

Both banks, previously controlled by S Alam Group, are reeling from liquidity crises due to large loans allegedly obtained by the group, often flouting banking regulations. Following the fall of the Awami League government in August, Bangladesh Bank restructured the boards of both banks, removing the group’s influence.

Union Bank’s new board, formed on August 27, justified the mass terminations as cost-cutting, citing that the employees, recruited in February without a formal hiring process, were trainee-level staff primarily from Chattogram upazilas.

At First Security Islami Bank, the new board’s investigations revealed irregular loan disbursement irregularities across 24 branches. The 194 withdrawn officials face potential dismissal pending further actions, with more staff under scrutiny. Alam remains untraceable.