After four and a half months, the Bangladesh Bank once again dissolved the National Bank's board today (5 May).

The central bank has formed a new board of directors headed by the new chairman, Khalilur Rahman, according to sources. Khalilur, a longstanding entrepreneurial shareholder of National Bank, is also the chairman of the KDS Group.

The Bangladesh Bank conveyed this decision through a letter to the managing director of National Bank.

The new 10-member board includes three independent directors. There is no one from the family of National Bank founder late Zainal Haque Sikder serving as a director this time. Last December, only Parveen Haque Sikder was appointed to the board from the family.  

The central bank's letter stated that this decision was made under the authority of the Bank Companies Act, 1991, to safeguard the interests of depositors and banks, and to ensure good banking governance.

Seven new directors have been appointed to National Bank's new 10-member board. Among them, four are representative directors and three are independent directors.

On 21 December, the Bangladesh Bank dissolved the National Bank's board on the recommendation of the Bangladesh Securities and Exchange Commission (BSEC).

In that board, Syed Ferhat Anwar, former professor of Dhaka University's Institute of Business Administration, was appointed as the new chairman of the bank.

Who are the new directors?

Former managing director of Premier Bank Mohammad Riazul Karim, businessman Ershad Mahmud, advocate Ehsanul Karim, and professor AKM Tofazzal Haque of Chattogram University have become representative directors of the new board.

Additionally, Professor Helal Uddin Nizami of the same university, Chartered Accountant Dr Ratna Dutta, and former Executive Director of Bangladesh Bank ABM Zahurul Huda are also on the board.

The other members of the board include Khalilur Rahman and two members of the previous board.

"Without any discussion, the central bank decided to merge National Bank with UCB. On 9 April, the last working day before Eid, fear spread among depositors and officials after learning of this decision. Many people started withdrawing money from the bank," said a former director on the board of National Bank.

Speaking on condition of anonymity, he added, "We have written to some major defaulting customers for repayment. They are unhappy with us. Additionally, our board does not support the merger decision."

"We have stated that our board has only been in place for four months. If we had been given at least a year, the bank would have shown much more improvement. However, before that could happen, the central bank dissolved the board," he said.

An initial proposal was made to merge National Bank with United Commercial Bank (UCB). In response, the National Bank board decided on 28 April that they do not want to merge.

In 2023, National Bank reported a loss of Tk1,497 crore. The previous year, its loss was Tk3,285 crore.