Govt cancels contracts of three state-owned bank MDs in financial sector overhaul

Towkibul Hasan Siam Date: 19 October 2026

The government has cancelled the contractual appointments of the managing directors and chief executive officers of three leading state-owned banks as part of a major move to strengthen banking governance, curb defaulted loans and improve administrative efficiency.

The Financial Institutions Division of the Ministry of Finance issued three separate notifications and letters on Monday (19 October 2026) concerning Sonali Bank PLC, Janata Bank PLC and Rupali Bank PLC. The decision formally ends the remaining contractual terms of Sonali Bank’s Md Shawkat Ali Khan, Janata Bank’s Md Mujibur Rahman and Rupali Bank’s Kazi Md Wahidul Islam.

The directive, issued under an administrative decision by the Financial Institutions Division, said the three had been relieved of their duties in the public interest and in accordance with the terms of their contracts. They were appointed for three-year terms in October 2024 to revitalise the banks’ day-to-day operations amid the administrative circumstances at the time. Subsequently, however, the banks failed to achieve the desired progress in credit management, particularly in handling their large volumes of defaulted loans, and in overall risk management. This prompted a renewed emphasis on professional bank management.

Analysts say the abrupt changes at the top of these leading state-owned banks go beyond replacing individuals and reflect a strategic effort to restructure the country’s financial sector and strengthen administrative accountability. The current economic and corporate governance challenges have created a need for capable, dynamic leaders with fresh perspectives at these banks.

It has been learnt that the administrative process of appointing new managing directors or assigning interim responsibilities will be completed very soon without disrupting regular operations. This is expected to help maintain depositors’ confidence and improve the operational efficiency of the state-owned banks.