Bangladesh Bank has hurriedly approved the newly elected board members and managing director of Social Islami Bank following Chittagong-based S Alam Group’s move to tighten its grip on the private commercial bank.
The BB on Monday evening approved the appointment of new chairman Anwarul Azim Arif, executive committee chairman Belal Ahmed and managing director Quazi Osman Ali after they were elected and appointed to the posts on Monday afternoon at a meeting of SIBL, officials of the central bank said.
They all have links with S Alam Group which recently bought around 40 per cent share of the bank through various companies owned by the Group or family-associated companies.
With the SIBL ‘takeover’ and the recent tightening its grip on Islami Bank Bangladesh, S Alam Group or people having links with it now hold control over at least seven banks including First Security Islami Bank, Al-Arafah Islami Bank, Union Bank, Bangladesh Commerce Bank and NRB Global Bank.
Economists said that taking control of so many banks by a single business group would result in family-controlled loan disbursement and hider corporate governance in the banks.
Senior officials at different branches of SIBL, however, expressed their deep concern about the dramatic changes in the bank’s board and management.
BB officials said that the central bank had vowed down to the business group several times as it (the group) maintained a strong link with the government.
The newly elected SIBL chairman, Anwarul Azim Arif, attended office on Tuesday.
Anwarul along with Islami Bank chairman Arastoo Khan, who also represents one of the companies of S Alam Group in Islami Bank board, met BB governor Fazle Kabir on Tuesday.
On condition of taking no question from reporters, Bangladesh Bank executive director Subhankar Saha on Tuesday said, ‘Change in any bank’s board is regulated by companies act as banks are formed under companies act and here Bangladesh Bank has nothing to do.’
He, however, said, ‘There is a requirement of getting no-objection certificate from Bangladesh Bank for fulfilling the process of appointing any new directors in the board of a bank and the BB checks credit information bureau report of the bank in issuing an NOC.’
‘If the CIB report is found clean, the BB usually issues NOC for the appointment of a director,’ he said.
Asked about the changes in SIBL board, former
adviser to an interim administration AB Mirza Azizul Islam said that it was a matter of concern that family control over the bank might get intensified and that might ultimately hinder corporate governance in the bank.
Besides, there may also be hindrance to loan proposal scrutiny and flexibility in recovering loans at the bank, he said.
He, however, hoped that Bangladesh Bank would keep a close watch on the entity so that the concerns he expressed could not be turned real.
Mentioning that there is lack of transparency in changing ownership in Bangladesh compared with other countries, former Bangladesh Bank deputy governor Ibrahim Khaled told New Age, ‘The new owners should at least clarify their intention behind taking control of SIBL as they have already taken control of five Islami banks.’
The new owners should clarify the reason for purchasing shares of the bank for ensuring transparency and retaining clients’ confidence on the bank, he said.
He also recommended appointment of professionals, who would be acceptable and capable, to operate the bank.
Although the newly appointed SIBL chairman, Anwarul Azim Arif, a former vice-chancellor of Chittagong University, is a learned person, Anwarul lacks administrative and banking skills, he added.
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