Bangladesh Bank yesterday suspended Intekhab Alam, managing director of Phoenix Finance and Investments Ltd, over allegations of being involved in loan irregularities and activities that go against the interest of depositors.

The central bank on the day sent a letter to the chairman of the non-bank financial institution (NBFI) stating that an inspection report on the organisation revealed loan irregularities committed by officials at various levels, including the managing director.

As a result, the banking regulator has taken the decision under the Finance Companies Act 2023.

The central bank instructed to suspend the MD and attach him with the human resources department and appoint a new chief executive for the company.

The central bank also instructed to take administrative and legal action against officials involved in loan irregularities on identifying them through an internal audit.

The NBFI will have to suspend the foreign trips of officials concerned when the administrative and legal action are taken, said the BB letter.

Alam could not be reached for comments despite repeated calls and messages.

A senior official of the central bank said the banking regulator has taken this initiative to bring discipline and ensure compliance to regulations in the financial sector.

The NBFI sector is facing a difficult situation due to a lot of loan irregularities and scams. After banks, it is now the NBFI sector that has logged a record volume of defaulted loans.

At the end of June, the sector's defaulted loans accounted for a staggering 27.65 percent of its total outstanding loans, according to the latest data published by the Bangladesh Bank.