Social Islami Bank: Shareholders say ‘No’ to forced merger
Business Report :
Though Bangladesh Bank (BB) has proposed merging five banks into a single entity, but nine shareholders of Social Islami Bank have requested that their institution be excluded from the process, citing concerns over its management and financial condition.
The banks involved in the planned merger are First Security Islami Bank, Union Bank, Global Islami Bank, Social Islami Bank, and Exim Bank.
In a letter sent on Tuesday to the Governor of Bangladesh Bank and the Finance Secretary, nine shareholders – including the bank’s former chairman and current director Md Rezaul Haque -expressed opposition to the inclusion of Social Islami Bank in the merger.
The letter stated that most of the signatories had been involved in the management of Social Islami Bank from its establishment in 1995 until 2017. They alleged that, since 2017, the S Alam Industrial Group acquired control of the bank, with support from state intelligence agencies, and mismanaged its funds. The shareholders claimed that significant loans were disbursed without collateral and were subsequently moved abroad, and they criticized BB for facilitating, rather than preventing, these irregularities.
The letter also highlighted concerns over the current board of directors. According to the shareholders, after a change in government, the bank’s board was reconstituted with only one entrepreneurial director and four independent directors, despite qualified shareholder candidates being available.
They described this decision as ineffective in addressing the bank’s fragile financial condition. The shareholders argued that the merger process had begun without consulting the original entrepreneurs and stakeholders, calling it “unfair, unethical and illegal” and warning that it could further erode customer confidence.
They urged that management responsibility be returned to the bank’s original entrepreneurs and shareholders, adding that with support from Bangladesh Bank, customer trust could be restored, the bank’s financial health improved, and it could again become a commercially profitable institution.