In a rare move, the Bangladesh Bank has asked Islamic Finance and Investment Ltd (IFIL) to form a search committee for the appointment of a managing director at the non-bank financial institution.

The central bank gave the instruction on April 20 when it ordered IFIL not to appoint Mohammad Imdadul Islam as its chief executive. He is currently managing director of GSP Finance, another NBFI.

"The central bank had reviewed the service record of Islam and found some anomalies. For this reason, the BB did not give its consent to IFIL to appoint him," said a BB letter to the NBFI.

The post of the MD fell vacant in June last year after Abu Zafore Md Saleh resigned over allegations of breaching rules over hiring and enjoying financial benefits.

In December last year, the BB also asked IFIL to refrain from hiring Chowdhury Manzoor Liaquat, a former MD of Union Capital, as its chief, as the financial health of the NBFI deteriorated under his leadership.

The latest BB move comes after it received allegations of misuse of power by some top officials of IFIL. This led the central bank to ask it to constitute a search committee to appoint the MD, according to an official of the BB.

"The central bank hardly asks any bank or NBFI to form a search committee for the recruitment of MD, but this time it has done so to protect the interest of IFIL."

Contacted, Imdadul Islam denied any wrongdoing. "I have a clean track record spanning more than 30 years," he said.

He alleged that an influential defaulter had recently tried to have the interest of a loan taken from IFIL waived, but the board of the NBFI did not entertain the proposal.

"The delinquent borrower has threatened me that I might lose my job and be ousted from the financial sector. I think there is a correlation between the threat and the latest development."

The BB also asked IFIL to publish at least four advertisements in Bangla and English dailies in a bid to appoint a managing director with a clean track record.

The search committee will have to be formed by the audit committee of the IFIL board, according to the BB letter.

SM Bakhtiar Alam, chairman of IFIL, could not be reached for comments.

SQ Bazlur Rashid, acting managing director of the non-bank, said the financial institution would take measures in line with the central bank's instruction.