Bangladesh Bank on Thursday dissolved the board of the troubled Export Import Bank of Bangladesh (EXIM Bank) and appointed a new five-member board.

The central bank officially notified EXIM Bank’s managing director of the decision through a formal letter, marking the end of Nazrul Islam Mazumder’s 16-year tenure as chairman, a position he had held since 2007.

Mazumder, who is a close ally of Salman F Rahman, the Private Industry and Investment adviser to former Prime Minister Sheikh Hasina, and other Awami League leaders, had significant influence in the banking sector.

He is also the founder of Nassa Group and has been actively involved with the Bangladesh Association of Banks since 2009. Additionally, he was the chairman of the Bankers Association of Bangladesh until his removal from EXIM Bank.

The central bank’s action also resulted in the removal of Mazumder’s wife, Nasreen Islam, from the board. On August 25, the Bangladesh Financial Intelligence Unit froze the bank accounts of both Nazrul Islam Mazumder and Nasreen Islam.

According to the central bank, the decision to dissolve the board was made to protect depositors’ interests and serve the public good.

The previous board was criticized for failing to make effective policy decisions and for engaging in activities harmful to depositors’ interests.

Significant loans were granted to various business groups without adequate collateral, and the recovery of these funds was persistently inadequate, leading to the bank’s current financial difficulties.

The newly appointed board includes former Bangladesh Bank executive director SM Rezaul Karim and chartered accountant Khandaker Mamun as independent directors.

Three shareholders—Md Nazrul Islam Shopon (3.54 per cent of the bank’s shares), Md Nurul Amin (2 per cent), and Anjan Kumar Saha (2per cent)—have also been appointed as directors.

So far, Bangladesh Bank has dissolved the boards of seven banks, including four directly controlled by S Alam Group.

These banks are Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank, National Bank, United Commercial Bank, and EXIM Bank.

The central bank plans to reconstitute the boards of several more ailing banks in the coming weeks.