Al-Arafah Islami Bank effectively returns to its original owners as its board has been reconstituted reinstating the bank's founding sponsors, in a latest major development in banking-sector restructuring.
Sources said Bangladesh Bank Wednesday reconstituted the bank board by incorporating 14 new directors.
Reconstituting the board by inducting the bank's original sponsors' 14 representatives marks the return of its original sponsors.
The central bank issued Wednesday a letter to the bank's managing director informing him of the decision.
BB Executive Director and Spokesperson Arif Hossain Khan confirmed the shakeup in the Islamic bank's board of directors.
"The bank's financial condition has improved compared to before, so it has been handed back to its founding sponsors," he said.
He added that the central bank had dissolved the boards of several other banks following the political transition in 2024, but their original sponsors could not be traced or were not available to take over management.
He terms the case of Al-Arafah Islami Bank different. "The founding sponsors are available, so the bank has been returned to them," Mr. Khan said.
The on the newly approved 14-member board are Badiur Rahman, Salim Rahman, Ahamedul Haque, Rafiqul Islam, Imadur Rahman, Nazmul Ahsan Khaled, Khalilur Rahman, Anowar Hossain, Abdus Salam, Liakat Ali Chowdhury, Enayet Ullah, Mahbub Ahmed as nominee-director of KDS Garments, Farid Uddin Ahmed as nominee- director of KDS Textiles, and Sharif Uddin Taslim as nominee- director of KY Steel Mills.
The BB letter obtained by the FE says, "The independent directors appointed earlier would continue as independent directors."
Khalilur Rahman, who is now on the Boards of Pragati Life Insurance and Pragati Insurance, should resign and inform the central bank to be eligible for the Al Arafah Bank PLC Board as per the Bank Company Act 1991.
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