Government Cancels Remaining Contract Terms of MDs of Sonali, Janata and Rupali Banks

The government has cancelled the remaining terms of the contractual appointments of the managing directors (MDs) and chief executive officers (CEOs) of three state-owned banks — Sonali, Janata and Rupali. This simultaneous change at the top of the country's largest state-owned banks is being seen as a major decision in the banking sector.

Those whose appointments have been cancelled are Md Shawkat Ali Khan of Sonali Bank, Md Mojibur Rahman of Janata Bank and Kazi Md Wahidul Islam of Rupali Bank. All three were serving in these posts on a contractual basis.

Three separate notifications in this regard were issued on Monday (19 October) by the Financial Institutions Division of the Ministry of Finance. At the same time, the boards of directors of the respective banks have been asked to take necessary measures.

In the Finance Ministry's letters, the government's consent was conveyed in the cases of Janata and Rupali banks. The boards of the respective banks have also been instructed to take subsequent action in accordance with the terms of the contracts and the prevailing laws.

Md Shawkat Ali Khan joined Sonali Bank as MD on 30 October 2024. He had been appointed to the post for three years. In other words, the remaining part of his contract has been cancelled before the end of his term.

Before joining Sonali Bank, Md Shawkat Ali Khan served as MD of Bangladesh Krishi Bank. He therefore has long experience in the state-owned banking sector.

Kazi Md Wahidul Islam, on the other hand, was appointed MD of Rupali Bank on a three-year contract. He too is leaving the post before the end of his term as a result of this government decision.

Md Mojibur Rahman was serving as MD and CEO of Janata Bank. In all three banks the decision has been implemented on the same day and through the same process, which suggests it is a coordinated government decision.

Following the cancellation of the remaining terms of the three banks' MDs, the boards of directors of the respective banks will now have to take the next steps according to the rules. The appointment of new MDs or the assignment of acting responsibilities will be determined through that process.

Sonali, Janata and Rupali are the leading institutions of the state-owned commercial banking sector. They have extensive branch networks across the country, and a large share of public banking services, including government transactions, runs through these banks. A change in top leadership may therefore also affect the banks' daily operations and policy decisions.

Although the government's notifications announced the cancellation decision, no detailed reason for the move was given in this report. The boards of the three banks will now take subsequent measures in line with the contract terms and prevailing laws.

Attention will now turn to the next step: who will become the new managing directors of the three banks, when those appointments will be finalised, and who will lead the banks in the interim. Once those decisions arrive, the new leadership picture of the state-owned banking sector will become clear.