Obayed Ullah-Al Masud on Thursday stepped down as chairman of Islami Bank, the country’s largest private sector bank, amid probe into his alleged corruption, authorities said.

His resignation came after reports about his involvement in corruption and his connection to controversial businessman S Alam. He submitted the resignation letter to the bank’s Board of Directors, which was formed by Bangladesh Bank following the country's political change last year.

Professor Zubaidur Rahman, the independent director of the Board of Directors of Islami Bank Bangladesh, is likely to be appointed as the new Chairman. The process of his appointment is underway, according to sources at the central bank.

After the Bangladesh Financial Intelligence Unit (BFIU), central bank's financial intelligence agency, sought bank account details of Masud, and five members of his family on July 14, he failed to meet the central bank governor. After that, Masud was preparing to resign.

The BFIU letter instructs banks to provide details of all accounts (including account opening forms and updated statements), savings certificates, bonds, lockers, credit cards, student files, pre-paid cards, gift cards, and vouchers for transactions of Tk 5 lakh or more related to Masud and his family members, or any entity in which they have an interest, by July 15.

This development comes amid serious allegations of financial irregularities and money laundering linked to a 1320MW coal-fired SS Power Plant project in Banshkhali, Chittagong. Approximately US$815.78 million was allegedly siphoned out of Bangladesh by just two Letters of Credit (LCs) for this project, implemented as a joint venture between S. Alam Group's subsidiary SS Power Limited and Chinese partner SEPCO. This vast sum was reportedly sent abroad for 'capital machinery imports,' even though not a single piece of machinery arrived in the country, according to a Bangladesh Bank investigation.

Sources indicate that 184 invoices were submitted against these two LCs, opened through Rupali Bank, but most were fraudulent or issued with future dates. Some invoices even used the names and export documents of other companies. Crucially, there is no import data for SS Power on the servers of the National Board of Revenue (NBR) or Bangladesh Bank, despite foreign currency being released, said the sources of the central bank.

At the time of these alleged irregularities, Masud was the Managing Director of Rupali Bank.