Bangladesh Bank (BB) has rejected a proposal for the reappointment of ICB Islamic Bank's managing director and directed taking legal measures against him, saying it had found proof of his involvement in mismanagement, money laundering and embezzlement.

The chairman of the bank's board of directors had sought the reappointment of Muhammad Shafiq Bin Abdullah, who had been appointed to the post in 2013.

Informing of the rejection through a letter to the chairman on November 19, the central bank also sought to know of the measures taken against Abdullah.

The banking regulator also directed taking necessary steps to fill the vacant post of managing director within the stipulated timeframe in compliance with Bank Companies Act-1991.

Earlier on October 21, the central bank had instructed the bank to appoint an acting managing director at the bank but the lender is yet to comply.

This correspondent of The Daily Star visited the head office of ICB Islamic Bank on Tuesday. Abdullah had gone out at that time.

Officials of the bank said Abdullah was coming to work as usual.

Contacted, Abdullah said the allegations were yet to be proven. "That is why I am at work till now," he said.

He said the board of directors had appealed against the central bank decision and requested keeping him as managing director.

ICB Islamic Bank had taken shape from the ruins of Oriental Bank in 2008. The bank's origins can be traced back to 1987 when it was operating under the moniker Al-Baraka Bank.

In 1994, it became a "problematic bank" and the central bank introduced the practice of appointing observers to errant banks to bring discipline. In 2004, it started operating as a scheduled commercial bank under a new name, Oriental Bank.

In June 2006, the central bank dissolved the board of directors of Oriental Bank after detecting massive irregularities.