Bangladesh Bank has announced plans to dissolve the board of Islami Bank, currently controlled by S Alam Group, as part of broader reforms aimed at ensuring good governance in the banking sector.
Governor Ahsan H. Mansur made the announcement during a press conference held at the central bank’s headquarters on Wednesday. He said that the current board of Islami Bank would be dissolved and replaced by a smaller board, formed with the government’s assistance.
Additionally, an independent director will be appointed within the next two days. Action will be taken on the boards of all banks controlled by S Alam Group in stages.
He also noted that former directors holding at least 2 percent of the bank’s share capital would be reinstated to the board, addressing the current situation.
Governor Mansur further announced that the government would take control of all shares (82 percent) linked to S Alam and related companies. “If S Alam Group settles all their dues, their shares will be released; otherwise, the shares will be adjusted accordingly,” he added.
Currently, the banks under S Alam Group’s control include Islami Bank Bangladesh, First Security Islami Bank, Al-Arafah Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank, and Bangladesh Commerce Bank.
S Alam Group took over Islami Bank in 2017. Since then, the group has reportedly withdrawn Tk 75,000 crore from the bank through undisclosed channels.
Under the Bank Companies Act, a single individual, family, or group is legally allowed to own a maximum of 10 percent of a bank’s shares. However, after taking control of Islami Bank, S Alam Group acquired 81.92 percent of the bank’s shares, distributed across 24 institutions.
In response, the Bangladesh Securities and Exchange Commission (BSEC) has banned the transfer of S Alam’s shares.
