In a dramatic move that could reopen one of Bangladesh’s most controversial banking restructurings, former sponsor-directors of Social Islami Bank PLC (SIBL) on Monday formally applied to Bangladesh Bank seeking to reclaim control of the bank from the newly created merged entity, invoking the contentious legal provision inserted into the Bank Resolution Act, 2026.
The application, submitted by former SIBL chairman and sponsor shareholder Major Dr Md Rezaul Haque (Retd.) on behalf of the previous board, requests the central bank to review and amend the existing resolution scheme under Section 18(a) of the new law�"a clause that now permits former owners of distressed or merged banks to re-acquire shares, assets and liabilities subject to regulatory approval and fresh financial commitments.
With this filing, SIBL has become the first major bank to test the politically explosive “buyback window” that critics say could reverse the entire clean-up architecture of Bangladesh’s fragile banking sector.
“We have applied and we wish to get back our bank as per all procedures,” former shareholder Zebedul Alam Chowdhury told The Daily Observer.
He said the former sponsors were prepared to return with renewed capital backing and a pledge to run the bank under Bangladesh Bank’s full regulatory discipline.
“We have already talked with all our shareholders. We will invest afresh and run the bank maintaining all rules and Bangladesh Bank compliances,” he added.
The former board argued in its petition that SIBL had suffered from an acute liquidity squeeze, not outright insolvency, and therefore should not have been permanently folded into the state-engineered merger process.
According to the application, the earlier resolution decision failed to reflect the bank’s true financial potential and should now be reconsidered under a revised governance arrangement.
A Bangladesh Bank spokesperson acknowledged hearing about the submission but said no official comment would come before the matter reaches Governor Dr Ahsan H Mansur’s desk for formal examination.
The application lands at the heart of an already heated national controversy.
In 2025, Bangladesh Bank merged five crisis-ridden Shariah-based lenders�"Social Islami Bank, First Security Islami Bank PLC, Global Islami Bank PLC, Union Bank PLC and EXIM Bank PLC�"into a consolidated institution named Sommilito Islami Bank PLC after years of severe liquidity stress, alleged loan irregularities and governance collapse. Former sponsor groups were stripped of effective control during that rescue operation.
But the enactment of the Bank Resolution Act, 2026 this month fundamentally altered that framework.
The newly inserted Section 18(a) created a legal route for former shareholders to seek restoration of ownership if they undertake to inject fresh capital, repay all financial support provided by the government and Bangladesh Bank, settle liabilities to depositors and creditors, clear dues, and rebuild governance, risk management and compliance systems.
The provision has triggered fierce criticism from economists, anti-corruption campaigners and banking analysts, many of whom argue that it risks handing distressed banks back to the very sponsor groups accused of driving them into crisis.
Transparency advocates have already warned that the law may end up institutionalising impunity rather than accountability, while several economists described it as a dangerous rollback of the interim banking reform agenda.
Against that backdrop, SIBL’s application is being watched not merely as an isolated ownership plea, but as a watershed test of whether Bangladesh’s banking clean-up will hold�"or begin to unravel.
If Bangladesh Bank entertains the request, it could open the floodgates for former sponsors of other merged weak banks to submit similar petitions, potentially placing the entire Sommilito Islami Bank restructuring under fresh uncertainty.
The stakes are exceptionally high because the five-bank merger involved massive public liquidity support and was designed to restore depositor confidence after prolonged instability in the Islamic banking segment.
Any reversal now would raise difficult questions over financial accountability, regulatory credibility and whether state-backed rescue capital is ultimately being used to rehabilitate previous owners.
For now, the final decision rests with the central bank governor.
But Monday’s application has already sent a shudder through the banking sector: the battle over who controls Bangladesh’s troubled banks is far from over.
