To address the ongoing crisis at Islami Bank Bangladesh, the nation’s largest Shariah-compliant bank, Bangladesh Bank has appointed a new board of independent directors. The overhaul follows widespread allegations of massive financial irregularities linked to the S Alam Group.

The Banking Regulations and Policy Department of the central bank issued an official letter to Islami Bank’s managing director, instructing immediate implementation of the changes.

Md Obayed Ullah Al Masud, former managing director of Rupali Bank, has been appointed as the new chairman of Islami Bank’s board. Joining him as independent directors are Mohammad Khurshid Wahab, a former executive officer of Bangladesh Bank; Mohammad Abdul Jalil, a former deputy general manager at Al Arafah Islami Bank; M Masud Rahman, a former professor of finance at the University of Dhaka; and Md Abdus Salam, a chartered accountant.

This shake-up effectively ends the seven-year control of Islami Bank by S Alam Group, which has been accused of misappropriating nearly Tk 75,000 crore under the guise of loans. The group's influence in the bank was solidified in 2017, when they took over ownership, leading to rampant financial exploitation.

Mohammed Saiful Alam, chairman of S Alam Group, had placed his eldest son, Ahsanul Alam, as the chairman of the recently dissolved board.

Following the formation of the interim government, Bangladesh Bank dissolved the board of directors of Islami Bank Bangladesh and National Bank. Both banks had been under scrutiny for catering to special interests at the expense of financial stability.

S Alam Group’s control of Islami Bank had raised significant concerns, particularly because the group accumulated 81.92% of the bank’s shares—well beyond the legal limit. Under the Bank Companies Act, no single person, family, or group is permitted to own more than 10% of a bank’s shares. To bypass this regulation, S Alam Group had acquired 131 crore 89 lakh 12 thousand 165 shares through 24 different institutions.

Adding to the measures against S Alam Group, the Bangladesh Securities and Exchange Commission (BSEC) has banned the transfer of their shares in Islami Bank, further tightening the oversight on the group’s activities.