National Bank's new board plans to inject Tk1,000cr – who are the new directors?
The newly formed board of directors of National Bank, facing financial losses, intends to infuse Tk1,000 crore in capital to address the financial challenges, said its Chairman Khalilur Rahman today. However, he refrained from specifying the companies represented by the new directors.
In a press briefing at the bank's headquarters in the capital's Banglamotor, the new chairman pledged to raise Tk4,000 crore in capital, with an initial infusion of Tk1,000 crore from directors/shareholders and the remaining Tk3,000 crore through deposits.
After four and a half months of forming a new board, the Bangladesh Bank on Sunday dissolved the National Bank's board again and appointed a new one led by Khalilur Rahman, a longstanding shareholder of the bank and chairman of the KDS Group.
We have discussed [the issue of merger] with the central bank. We will not go for a merger and instead, turn the bank around with our own efforts.
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Seven new directors have been appointed to the new 10-member board. Among them, four are representative directors and three are independent directors.
When questioned about the companies represented by the new four representative directors, Chairman Khalilur Rahman tactfully avoided the question.
Instead of clarifying which companies the directors represented, he cited time constraints, mentioning that the central bank had summoned him for a meeting.
The four representative directors were also present at the event. When journalists sought to ascertain the companies these directors represented in their roles at the bank, they departed without providing any information.
Asked whether the National Bank had undergone a takeover, Khalilur Rahman responded that it had not. The new board members were appointed by the government.
After the press conference, when asked about how the government could appoint representative directors to a private bank's board, he declined to comment and proceeded to his office.
Referring to defaulted borrowers, Khalilur Rahman said businessmen who have borrowed from National Bank must repay their loans; there will be no leniency. He expressed confidence that the bank will emerge stronger within a year.
Reporters queried Chairman Khalilur Rahman, noting his longstanding tenure as a director at the bank, and sought his stance on past instances of alleged looting through loan scams. In response, he assured that even if such incidents occurred previously, they would not recur.
Responding to a question about whether the bank will go for a merger, he said, "We have discussed it with the central bank. We will not go for a merger and instead, turn the bank around with our own efforts."
Who are the new directors?
According to central bank sources, most of the newly appointed representative directors and independent directors are affiliated with a Chattogram-based conglomerate.
Out of the 10 members on the new board, seven have been reappointed by the central bank.
Mohammad Reazul Karim, former managing director of Premier Bank, has assumed the role of a representative director.
Central bank sources said Reazul has been appointed as the representative of a subsidiary of the KDS Group, led by the current chairman, Khalilur Rahman.
Another representative director is Ershad Mahmud, brother of Foreign Minister Hasan Mahmud, with roots in Rangunia upazila of Chattogram. He has also assumed a directorial role at the National Bank on behalf of a Chattogram-based business entity.
Additionally, Ehsanul Karim, a senior advocate of the Bangladesh Supreme Court, has taken on the role of representative director. He also represents a company affiliated with the Chattogram-based conglomerate.
Furthermore, AKM Tafzal Haque, a professor at Chittagong University, also assumed a directorial position at this bank representing the conglomerate.
Among the three new independent directors is Helal Uddin Nizami, also a professor at Chittagong University.
Another independent director is Ratna Dutta, a chartered accountant. Her spouse, Subrata Kumar Bhowmick, serves as the executive director (Finance) of the Chattogram-based conglomerate.
Additionally, ABM Zahurul Huda, former executive director of the central bank, is one of the three independent directors on the National Bank board. He now heads a training institute affiliated with a prominent bank, owned by the conglomerate in Chattogram.
National Bank makes monetary offers, journalists decline
Towards the end of the press briefing, officials from the National Bank presented snack bags to the journalists. Some journalists accepted the bags and found snacks inside, along with a National Bank diary and an envelope containing Tk5,000.
However, journalists opted not to accept envelopes containing money. They reiterated their commitment to unbiased news coverage and expressed discomfort about the envelopes from the bank.
Around 150 journalists and TV camera operators attended the National Bank press conference, where a gift bag was prepared for each attendee. The bank aimed to distribute around Tk7.5 lakh to journalists, with each envelope containing Tk5,000.
The rationale behind this gesture from the loss-making bank remains unclear.
As per the bank's annual report, it incurred a loss of Tk1,497 crore in 2023. This marks a reduction in losses by around 54% compared to the previous year when the bank's loss amounted to Tk3,285 crore. Despite the decrease, the loss figure remains considerably high.
Established in 1983, National Bank's Founding Chairman was (late) Zainul Haque Sikder, who owned the Sikder Group.
On 21 December last year, the Bangladesh Bank dissolved the board of the National Bank based on the recommendation of the Bangladesh Securities and Exchange Commission (BSEC).
Syed Ferhat Anwar, a former professor at Dhaka University's Institute of Business Administration, was appointed as the new chairman of that board. Notably, two sons and the wife of Zainul Haque Sikder were excluded from the board, while Sikder's daughter, Parveen Haque Sikder, retained her position.
However, the central bank did not include any members of the Sikder family to the board established on Sunday.
