Al-Arafah Islami Bank gets new board as BB restores sponsor control

Bangladesh Bank has returned the management control of private-sector Al-Arafah Islami Bank to its original sponsors, citing significant improvements in the bank's financial condition. The central bank dissolved the previous board of directors and constituted a new 14-member board.

The new board was formed on Wednesday under Sections 45 and 47(3) of the Bank Companies Act, 1991. It comprises 12 sponsor directors and two independent directors.

Bangladesh Bank Executive Director and spokesperson Arif Hossain Khan confirmed the development. He said that although the boards of 16 banks were dissolved previously, the original sponsors of most of those banks could not be traced. 

In contrast, Al-Arafah Islami Bank's original sponsors remained identifiable, and the bank had achieved a notable turnaround in its financial performance, prompting the central bank to restore management control to them.

Chattogram-based industrial conglomerate KDS Group has secured significant representation on the newly formed board.

Its representatives include Khalilur Rahman, Chairman of KDS Group; Mahbub Ahmed, representing KDS Garments Industries Limited; and Farid Uddin Ahmed, representing KDS Textiles Mills Limited.

The 14-member board also includes former chairman Badiur Rahman and veteran entrepreneurs Selim Rahman, Alhaj Ahamedul Haq, Md. Rafiqul Islam, Mohammed Imadur Rahman, Nazmul Ahsan Khaled, Anwar Hossain, Mohammad Abdus Salam, Liyakat Ali Chowdhury, Md. Enayet Ullah, and Mohammad Sharfuddin Taslim, representing K.Y. Steel Mills Limited. Following the political transition in August 2024, Bangladesh Bank dissolved the then board of Al-Arafah Islami Bank. During the Awami League government's tenure, the bank was chaired by Abdus Samad Labu, brother of the head of the controversial S. Alam Group. The central bank subsequently appointed an independent five-member board led by Khaja Shahriar.

The other members of the interim board were Md. Shahin Ul Islam, Md. Abdul Wadud, M. Abu Yusuf, and Mohammad Ashraful Hasan. After overseeing the bank for an extended period, the board succeeded in improving its financial health, leading Bangladesh Bank to restore management control to the original sponsors.