Bangladesh Bank reshapes Al-Arafah Islami Bank board with shareholders

The central bank of Bangladesh has restructured the board of directors of Al-Arafah Islami Bank PLC by appointing 14 sponsor shareholders to the governing body. This decision, finalized on Wednesday, 15 July, marks a major step towards returning the private sharia-compliant commercial lender to shareholder control after a period of direct regulatory oversight.

Arif Hossain Khan, an executive director and the official spokesperson of Bangladesh Bank, confirmed the move. He noted that the new appointments will work alongside the existing independent directors to guide the bank’s future operations.

Transition from independent regulatory control

Following the major political transition in August 2024, Bangladesh Bank dissolved the boards of 16 commercial banks—including Al-Arafah Islami Bank—due to governance concerns and financial irregularities associated with their previous regimes. Since then, Al-Arafah Islami Bank had been managed by a streamlined five-member board consisting entirely of independent directors.

With the induction of the 14 shareholder directors, the total number of board members has risen to 19. According to the central bank spokesperson, the decision to reinstate sponsor shareholders was driven by a notable recovery in the bank’s financial health.

Unlike several other restructured lenders where sponsors remain untraceable or unfit to serve, Al-Arafah’s shareholders remained actively engaged and eligible to assume corporate responsibilities. Consequently, the regulator deemed it appropriate to hand management control back to the bank’s primary owners.

Key appointments and the KDS Group presence

The newly reshaped board includes prominent business figures, with Chittagong-based industrial conglomerate KDS Group securing three representative seats. The 14 shareholder directors appointed to the board are:

• Khalilur Rahman (Chairman of KDS Group)

• Mahbub Ahmed (Representing KDS Garments)

• Farid Uddin Ahmed (Representing KDS Textile)

• Sharif Uddin Taslim (Representing KY Steel Mills)

• Badiur Rahman

• Md. Enayet Ullah

• Selim Rahman

• Ahamedul Haq

• Md. Rafiqul Islam

• Mohammad Imadur Rahman

• Nazmul Ahsan Khaled

• Anwar Hossain

• Mohammad Abdus Salam

• Liaquat Ali Chowdhury

Independent directors and the path forward

The five independent directors who managed the bank during the interim transition period will retain their positions on the newly expanded board. This group consists of Khaja Shahriar (the outgoing interim chairman), Md. Shahin Ul Islam, Md. Abdul Wadud, Dr M. Abu Yusuf, and Mohammad Ashraful Hasan.

Their continued presence is intended to ensure regulatory compliance, institutional continuity, and objective oversight as the new board takes charge.

The expanded 19-member board of directors is scheduled to convene shortly. Their first order of business will be to formally elect a new chairman to lead the financial institution through its next phase of commercial growth.