Ex-SIBL board seeks to reclaim ownership, promises to run bank independently

Former directors of Social Islami Bank Limited (SIBL) have approached Bangladesh Bank seeking to regain ownership of the bank and separate it from the state-owned Sammilito Islami Bank, sparking fresh debate in Bangladesh’s banking sector over governance, accountability, and financial recovery.

Five former directors of Social Islami Bank Limited (SIBL) have formally applied to Bangladesh Bank (BB) to reclaim ownership of the bank and restore it as an independent entity, separate from the recently established state-owned Sammilito Islami Bank.

The application was submitted on Monday and was led by Rezaul Haque, who served as chairman of SIBL from 2013 to 2017. The move comes shortly after the national parliament passed the “Bank Resolution” Bill on April 11, which included the controversial Section 18(A), allowing former shareholders to regain ownership of banks under specific legal conditions.

Speaking on the matter, Rezaul Haque said they are fully prepared to revive the bank and meet the financial requirements needed for recovery.

“We can manage the capital required to fix the bank. We have already shared our proposal and are ready to provide further details if Bangladesh Bank wants further engagement,” he said.

The other former directors who signed the application include Jabedul Alam Chowdhury, Hakim Md Yousuf Harun Bhuiyan, Sultan Mahmood Chowdhury, and Afia Begum.

Sammilito Islami Bank was formed on December 21, 2024, under the previous interim government through the merger of five financially distressed private Shariah-based banks. These banks were EXIM Bank, First Security Islami Bank, Global Islami Bank, Union Bank, and Social Islami Bank Limited (SIBL).

Under the original ordinance, all previous shareholders’ stakes were declared void, and the government injected Tk 200 billion to nationalize and stabilize the newly formed mega-bank.

However, after the BNP-led government assumed office, the ordinance was converted into a formal law with the addition of Section 18(A). This newly inserted clause created a legal opportunity for former directors and shareholders to apply for reinstatement and reclaim ownership.

The issue has drawn significant attention because many of these former directors were in charge during periods marked by rising loan defaults, financial irregularities, and allegations of large-scale money laundering within the banking system.

Bangladesh Bank spokesperson and Executive Director Arief Hossain Khan said the central bank would review the application according to legal procedures.

He stated that once the application reaches the appropriate department, it will be examined based on the law, adding that it is still too early to make any official comment regarding the outcome.

In their proposal, the former SIBL directors presented a detailed recovery roadmap aimed at restoring the bank’s financial stability if it is allowed to operate independently once again.

One of the key proposals includes a request for Tk 110 billion in liquidity support from Bangladesh Bank for a period of 10 years at the prevailing bank rate. They believe this support would help stabilize the bank’s operations and restore depositor confidence.

The proposal also promises fresh capital injection from the former owners to strengthen the bank’s financial base and improve internal governance.

Additionally, they have committed to reducing the bank’s non-performing loan (NPL) ratio to 25 percent by December 2026, which is considered a major target for restoring long-term sustainability.

Another important part of the recovery strategy involves reactivating 22 dormant government accounts, which could help recover nearly Tk 5 billion in funds.

The five banks involved in the merger were officially declared “dysfunctional” by Bangladesh Bank on November 5, 2025. Following that decision, trading of their shares was suspended on the stock exchange.

At present, Sammilito Islami Bank is operating under the supervision of a government-appointed administrator as the merger and restructuring process continues.

The latest move by former SIBL directors has once again placed Bangladesh’s banking reform efforts under the spotlight, raising important questions about accountability, ownership rights, and the future structure of the country’s Islamic banking sector.

Whether Bangladesh Bank approves the request or not, the decision is expected to have a major impact on the future of SIBL and the broader financial sector in Bangladesh.

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