Power struggle shakes banking sector after govt change

• Former promoter directors take control of Social Islami Bank Limited 
• Struggle for ownership is ongoing at National Bank
• Islami Bank Bangladesh officials allow no reps from S Alam Group 
• Partex Group is trying to reclaim United Commercial Bank PLC

Banks previously controlled by companies aligned with the ousted Awami League government have experienced significant power shifts and unrest in recent days, following the government’s fall.

Several top-level officials from these banks have resigned, leading to disruptions in banking operations, including a halt in loan approvals and disbursements.

Protests erupted in several banks on Thursday, with demands to identify and take action against those involved in money laundering, to cancel illegal appointments, and to reinstate employees who were arbitrarily dismissed.

Former promoter directors took control of Social Islami Bank Limited (SIBL), previously controlled by S Alam Group, on Thursday, bank sources said.

Additionally, a struggle for ownership is ongoing at National Bank, which was also under S Alam Group’s control. The whereabouts of the chairman and directors of the bank are currently unknown.

Earlier in the week, Islami Bank Bangladesh PLC officials announced that no representatives from S Alam Group would be allowed entry into the bank.

The group had taken control of Islami Bank in 2017, but employees have now barred directors and employees appointed by them from entering the bank premises.

Since Tuesday, none of the higher-level officials appointed by S Alam Group have reported to the bank. When a few employees hired after 2017 attempted to enter the bank’s offices on Thursday, they were removed by other employees.

Meanwhile, at SIBL, former chairman Major (Retd) Dr Rezaul Haque, former director Anisul Haque, and several other directors visited the bank and occupied the boardroom.

Employees gathered and demanded that the bank be freed from S Alam Group’s influence, bank sources said.

Under pressure, deputy managing directors Abdul Hannan Khan and Mohammad Habibur Rahman, who were trusted by S Alam Group, resigned.

The bank’s managing director was not present at the time, and with the board members in hiding, it remains unclear if the resignations will be accepted.

United Commercial Bank PLC, which was taken over by the family of former land minister Saifuzzaman Chowdhury Javed in 2017 from the Partex Group, is also facing unrest.

Shareholders and officials have declared that the current directors will no longer be allowed entry into the bank.

The family of Partex Group’s founding chairman, MA Hashem, is now attempting to regain ownership of the bank.

On Wednesday, several shareholders sent a letter to the governor of Bangladesh Bank and the chairman of the Bangladesh Securities and Exchange Commission, highlighting the bank’s poor financial condition and demanding a change in ownership.

On Thursday, shareholders organised a human chain, accusing Javed’s family of illegally smuggling Tk12,000 crore from UCB to London and demanding that the bank be freed from their influence.

In the midst of these upheavals, Bangladesh Bank Governor Abdur Rauf Talukder has not reported to the office since Monday, leaving officials unaware of his whereabouts.

On Wednesday, four deputy governors agreed to resign following widespread criticism. Executive directors are currently managing the central bank’s daily operations through internal discussions, and a meeting was held on Thursday to prevent a potential crisis.

Amid this turmoil, most banks have halted loan approvals and disbursements.

Following Wednesday’s unprecedented protest at the central bank, further protests took place on Thursday across several private banks, including IFIC, One, and Bangladesh Commerce Bank, as well as state-owned banks like Sonali, Janata and Agrani.

In the state-owned banks, employees protested against discrimination in promotions, demanding improved facilities and incentives.