Former entrepreneurs unwilling to go for merger

A profitable bank has been deliberately run down over the past seven to eight years, despite both its officials and the regulator remaining silent despite being fully aware of the situation. While a particular business group (S Alam) is largely responsible for the collapse of Social Islami Bank, Bangladesh Bank also bears significant responsibility for failing to curb irregularities and instead turning a blind eye to the group’s corruption.

However, no official from the bank or Bangladesh Bank has yet been brought to justice over these offences. Meanwhile, the bank is weakening further under what has been described as the arbitrary actions of inexperienced administrators. The current management is not supporting genuine businesspeople, and entrepreneur-directors have demanded that, instead of merging the bank, it be returned to its rightful owners.

These remarks were made yesterday at a press conference held at the National Press Club by the bank’s entrepreneur-directors, including former chairman Major (retd) Dr Rezaul Haque and his lawyer, Md Mahmudul Hasan.

In a written statement, Dr Haque said that those entrusted with running Social Islami Bank over the past 18 months have effectively “killed” it. He alleged that, through a unilateral decision by the central bank, shareholders had been reduced to nothing, placing them in financial ruin, while the burden of S Alam’s corruption was shifted onto ordinary investors.

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He said they had urged the government to exclude the bank from any merger process and return it to its rightful owners, who could have made significant progress over the past 18 months. Instead, he claimed, the inexperienced administrators had failed to support depositors or businesses, and in many cases had actively obstructed them. He also called on the government not to pass the Bank Regulation Act 2025.

Dr Haque further alleged that Bangladesh Bank was also responsible for weakening the institution and had been involved in looting, failing to act in the bank’s best interests. He said they wanted to sit with the central bank with an investment plan and be given an opportunity to revive the bank.

He added that although there had been assurances to return depositors’ funds, there had been little meaningful progress. Businesses associated with the bank were now facing existential threats due to a lack of support, with many forced to shut down after being classified as defaulters and denied loans by other institutions. He urged the government to resolve the matter urgently.

Lawyer Md Mahmudul Hasan alleged that during Sheikh Hasina’s tenure, individuals were forcibly taken to intelligence offices and made to sign documents relinquishing ownership of the bank. Fearing for their lives, they had remained silent at the time. After the change of government on 5 August, they had hoped the looting would stop and the bank could recover. However, despite receiving liquidity support, the bank failed to revive due to non-cooperation from former governor Ahsan H Mansur.

He claimed that entrepreneur-shareholders were deliberately sidelined and control handed to inexperienced individuals, who had failed to safeguard the bank’s interests over the past 18 months, operating it strictly under directives from Bangladesh Bank. As a result, the bank remains in deep crisis. He called for the bank to be returned to its original entrepreneurs and given a chance, including fresh investment.

Responding to questions, Hasan said that given the high level of non-performing loans and borrowing from the central bank, the bank should be given up to eight years to recover, as such liabilities cannot be settled overnight. He added that several major industrial groups, including IDB, were interested in investing, and expressed optimism that the bank could recover with sufficient time, even without relying on freshly printed money from the central bank.