Government Moves to Punish Directors and Officials Behind Banking Collapse

The government has taken a decisive stance to restore discipline within the financial sector after years of mismanagement across five troubled private Islamic banks. As these institutions prepare to merge into a newly formed “Shammilito Islamic Bank”, the authorities have initiated an extensive process to identify and punish those responsible for their downfall.

The Financial Institutions Division of the Ministry of Finance has formally instructed Bangladesh Bank to identify former owners, board members, senior executives and influential loan defaulters who contributed to the collapse. The central bank has also been directed to begin immediate recovery of defaulted loans and investments, signalling a zero-tolerance approach toward irregularities.

Structure of the New Bank

The merger involves First Security Islami Bank, Social Islami Bank (SIBL), Exim Bank, Global Islami Bank and Union Bank. The new financial institution is expected to stabilise the sector, protect depositors and ensure stronger governance. However, the government asserts that accountability must be established before fresh capital is poured into the restructured entity.

Bank-wise Breakdown of Failures and Responsible Individuals

Exim Bank

The bank was long dominated by Nazrul Islam Majumdar, former chairman of the Bangladesh Association of Banks. His wife, Nasrin Islam, and several close associates held board positions. During the most critical years, three long-serving managing directors—Farid Uddin Ahmed, Mohammad Haider Ali Mia and Mohammad Firoz Hossain—ran operations. Both Majumdar and Firoz Hossain are currently imprisoned.

Union Bank

Controlled by the powerful S Alam Group, the bank’s board was heavily influenced by family members. Initially chaired by Ahsanul Alam, it was later headed by Prof Md Selim Uddin. Influential businesspersons and retired military officers also joined the board. Former MD ABM Mokammel Haque Chowdhury reportedly fled the country following a change of government.

Global Islami Bank

Chaired by expatriate businessman Nizam Chowdhury, this bank also featured several S Alam family members on its board. Managing directors included Prashant Kumar (PK) Halder and later Habib Hasnat. Rampant mismanagement, reckless lending and pressure from powerful defaulters caused the bank’s rapid deterioration.

Social Islami Bank (SIBL)

S Alam Group took control of SIBL in 2017. The board was initially chaired by former Chittagong University Vice Chancellor Anwarul Azim Arif and later by Belal Ahmed, the group’s son-in-law. Despite significant board reshuffles, irregularities grew, particularly during the tenures of MDs Kazi Osman Ali and Zafar Alam.

First Security Islami Bank

Led by S Alam Group chief Mohammad Saiful Alam, the bank’s board also included his wife and several close relatives. Long-serving managing directors included AAM Zakaria and Syed Wasek Md Ali. Weak oversight, uncontrolled investment decisions and internal influence severely damaged the bank’s financial health.

The government emphasises that those responsible for driving these banks into instability will be held accountable. The upcoming merger is seen as a fresh start—one that must be free from the failures and impunity of the past.