Bangladesh Bank Removes Meghna, NRBC, And NRB Boards Over Misconduct4 min read

In a decisive move to restore discipline and protect depositors’ interests, the Bangladesh Bank has dissolved the boards of Meghna Bank, NRBC Bank, and NRB Bank. These fourth-generation private lenders, which commenced operations in 2013, are among the 14 troubled banks whose boards have been dissolved since the fall of the Awami League government in August last year reportedly.

Announcing the decision on March 12, the central bank cited policy weaknesses and governance failures as the primary reasons for the intervention. Bangladesh Bank spokesperson and Executive Director Arif Hossain Khan confirmed the move, stating that further details would be disclosed on March 13. To ensure continuity, the central bank has appointed new boards of directors to oversee the three financial institutions.

The Bangladesh Bank’s decision was driven by concerns that the dissolved boards had engaged in activities detrimental to depositors, financial stability, and the principles outlined in the Bank Company Act. Citing its authority under Sections 47(1) and 48(1) of the Act, the central bank ordered the immediate dissolution of the existing boards to safeguard public trust.

According to a letter signed by Governor Ahsan H Mansur and sent to the managing directors of the three banks, governance weaknesses had contributed to financial deterioration, disrupting banking discipline. Some of the sponsor directors of these institutions were reportedly linked to the previous Awami League administration, raising suspicions of politically motivated financial mismanagement.

The move has sparked debate, with one of the ousted bank chairmen, speaking anonymously, questioning the rationale behind the dissolution. He argued that the affected banks were not classified as critically weak and had not appeared on any prior central bank watchlists. He also suggested that political motives may have influenced the decision, given the connections between the banks’ sponsors and the former government.

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Expressing concern over the potential consequences, the former chairman warned that such abrupt restructuring could trigger a surge in withdrawals from nervous depositors. He also pointed out that the dismissed board members were currently abroad but had not violated any regulatory requirements, as the fiscal year had yet to conclude.

Meghna Bank’s board overhaul came against a backdrop of legal controversy. Its former chairman, HN Ashikur Rahman, a central treasurer of the Awami League and a former MP, was recently implicated in a murder case involving 224 other party leaders. The charges stem from a political killing in Mithapukur following the announcement of Jamaat-e-Islami leader Delwar Hossain Sayeedi’s death sentence.

The new Meghna Bank board includes sponsor shareholder Uzma Chowdhury and independent directors such as former Bangladesh Bank executive directors Md Mamunul Haque and Md Rojob Ali. Also appointed were former Jamuna Bank Managing Director Md Nazrul Islam, former Prime Bank Additional Managing Director Habibur Rahman, and chartered accountant Md Ali Akhtar Rizvi.

At NRBC Bank, the leadership crisis deepened following allegations of financial misconduct. Parvez Tamal, the bank’s former chairman, had his accounts frozen in November 2023 by the Bangladesh Financial Intelligence Unit (BFIU), alongside two senior bank officials. In February, a Dhaka court imposed a travel ban on Tamal over allegations of stock market manipulation, financial crimes, illicit earnings, and money laundering.

To stabilize operations, the newly appointed NRBC Bank board is chaired by independent director Md Ali Hossain Pradhania, a former managing director of Bangladesh Krishi Bank. Other members include former Bangladesh Bank executive directors Md Abul Bashar and Md Anwar Hossain, former Sonali Bank Deputy Managing Director Md Nurul Haque, and legal and financial experts such as Barrister Md Shafiqul Rahman and chartered accountant Muhammad Emdad Ullah.

Unlike the other two institutions, NRB Bank’s board was restructured without appointing a new chairman. Its former chairman, Mohammed Mahtabur Rahman (Nasir), was removed, and a new board was formed with key figures such as sponsor shareholder Iqbal Ahmed OBE, former Grameen Bank board member Ferdous Ara Begum, and chartered accountant Mizanur Rahman.

Despite their governance challenges, the three banks had non-performing loan (NPL) ratios below 6% as of 2023, compared to the sector-wide NPL ratio of 9%. However, by the end of 2024, the industry’s NPL ratio had surged to 17%, signaling deeper financial distress across Bangladesh’s banking sector.

Financial Health Overview of the Three Banks (2023 Data)

• NRB Bank: Tk6,685 crore in deposits, Tk6,007 crore in loans and advances, NPL ratio of 4.98%.
• NRBC Bank: Tk17,567 crore in deposits, Tk14,509 crore in loans and advances, NPL ratio of 5.35%.
• Meghna Bank: Tk6,502 crore in deposits, Tk5,204 crore in loans and advances, NPL ratio of 4.53%.

The Bangladesh Bank’s sweeping actions reflect its intensified crackdown on governance failures and financial mismanagement. Since taking office, Governor Ahsan H Mansur has overseen the dissolution of 14 bank boards, signaling a tougher regulatory stance.

While the central bank argues that these steps are necessary to restore stability, the restructuring of politically connected banks raises questions about the balance between financial oversight and political influence. With concerns over governance, regulatory compliance, and economic stability mounting, the impact of these changes on Bangladesh’s banking landscape remains to be seen.

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