The Bangladesh Bank on Thursday dissolved the board of the troubled Export Import Bank of Bangladesh and appointed a new five-member board.
The central bank notified the EXIM Bank鈥檚 managing director of the decision through an official letter.
This move ended the 16-year tenure of Nazrul Islam Mazumder as chairman, a position he had held since 2007.
Mazumder, a close ally of Salman F Rahman, the Private Industry and Investment adviser to the deposed prime minister Sheikh Hasina, and other Awami League leaders, had significant influence over the banking sector.
Mazumder, also the founder of Nassa Group, has been serving the private bank owners鈥� forum, Bangladesh Association of Banks since 2009.
He was also the chairman of the Bankers Association of Bangladesh, a body representing bank owners, until his removal from EXIM Bank.
Besides, the central bank removed Mazumder鈥檚 wife, Nasreen Islam, from the board.
On August 25, Bangladesh Financial Intelligence Unit froze bank accounts of Nazrul Islam聽Mazumder and his wife Nasrin Islam.
The central bank stated that the dissolution of the board was necessary to protect depositors鈥� money and serve the public interest.
The new board includes former Bangladesh Bank executive director SM Rezaul Karim and chartered accountant Khandaker Mamun, who have been appointed as independent directors.
Three shareholders鈥擬d Nazrul Islam Shopon holding 3.54 per cent of the bank鈥檚 shares, Md Nurul Amin holding 2 per cent, and Anjan Kumar Saha holding 2 per cent of the shares鈥攈ave been appointed as directors.
Bangladesh Bank officials said that the previous board鈥檚 failure to make effective policy decisions and its engagement in activities detrimental to depositors鈥� interests were reasons for the bank鈥檚 financial decline.
The board granted significant loans to various business groups without proper collateral and consistently failed to recover the funds, leading to the bank鈥檚 current difficulties, the officials added.
So far the central bank has dissolved board of seven banks, including 4 banks which are directly controlled by S Alam Group.
The seven banks are Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank, National Bank, United Commercial Bank and EXIM Bank.
The central bank planned to reconstitute boards of a few more ailing banks in the next weeks.
