How a new banking law could enable a quiet campaign to dismantle business empires linked to the previous government.
Having affirmed a recent ordinance amending its Bank Resolution Ordinance, questions are growing over the true intent behind the sweeping new powers the Bangladesh Bank now has. The reforms—publicly presented as measures to strengthen governance and accountability—have granted the central bank the authority to dissolve private bank boards, override shareholders, appoint administrators, and forcibly restructure institutions it deems unstable.
Now, following the announcement by the Bangladesh Bank to place six banks under state control, many observers are sounding the alarm that the legislation is not about systemic reform, but a tactical manoeuvre to seize control of banks and dismantle business empires aligned with the former Awami League government.
The driving force behind these proposals is Dr. Ahsan H. Mansur, Governor of Bangladesh Bank, BRAC Bank chairman, and former IMF economist. Though Mansur positioned the ordinance as part of a long-overdue effort to address insider lending and concentration of power in the name of economic stability, critics argue that its real function is to clear the way for a wave of politically sanctioned corporate takeovers.
The blueprint for what’s unfolding in Dhaka has long been visible elsewhere—in Russia and parts of Central Asia. In those countries, a tactic known as reiderstvo (рейдерство) has become an institutionalised method of state-backed corporate raiding. A familiar sequence is followed: state-aligned actors extend loans or regulatory support to a targeted business, then use legal levers and financial pressure to remove the original owners and seize control. If necessary, criminal charges are fabricated to eliminate resistance. The result: politically convenient transfer of assets, dressed up as reform.
Two notorious examples include:
- Yukos Oil Company – Once Russia’s largest oil company, Yukos was dismembered in the early 2000s after its founder Mikhail Khodorkovsky fell out with the Kremlin. After trumped-up charges of tax evasion, Yukos was bankrupted, and its assets sold off—mostly to state-owned Rosneft.
- Wimm-Bill-Dann – Russia’s leading dairy company was acquired under pressure by PepsiCo after internal shareholders were squeezed out using regulatory tools and financial coercion, with backing from state-linked financiers.
While the tools may differ, the end goal is the same: use the apparatus of state to reallocate economic control away from political opponents or independent power centers. Worryingly, Dr. Mansur recently announced that banks brought under state control would then be handed over to “powerful foreign investors”. The comment, made without clarification over which investors are under consideration, has raised more than a few eyebrows.
In Bangladesh, the central target appears to be S. Alam Group, a sprawling Chattogram-based conglomerate with major stakes in Islami Bank Bangladesh Ltd, Social Islami Bank, and First Security Islami Bank. For over a decade, S. Alam expanded its footprint across steel, power, shipping, and finance—often with alleged proximity to Sheikh Hasina’s Awami League.
Under the administration of Dr. Muhammad Yunus and his allies, the political calculus has shifted. Rather than a principled effort to clean up the sector, the push against S. Alam is being viewed by many as part of a broader political purge. The goal is to weaken or remove business actors seen as loyal to the old regime and consolidate control of key economic levers.
This is not limited to one group. According to multiple reports, at least ten major business conglomerates are facing increased regulatory scrutiny, audits, or asset exposure, including:
- Bashundhara Group
- Beximco
- City Group
- Square Group
- Anwar Group
- Partex Group
- AK Khan Group
- Jamuna Group
- Pran-RFL
- Navana Group
While these firms vary in industry and influence, what unites them is their real or perceived alignment with Sheikh Hasina’s government. The new political leadership, lacking a parliamentary mandate and reliant on public support for its anti-corruption narrative, appears to be pursuing economic reset by force—using central bank tools, legal reform, and targeted enforcement to do so.
Even if one accepts the premise that parts of the banking sector need reform, the weaponisation of legislation to remove specific business groups undermines trust in Bangladesh’s regulatory system. Investors—particularly from the Gulf and Southeast Asia—will question whether private ownership is secure if it can be undone by a change in political winds.
Moreover, the instability this creates could have unintended macroeconomic consequences. Forced restructuring of major banks could spark depositor anxiety, reduce credit availability, and weaken the flow of foreign investment—especially in Shariah-compliant finance, where long-term trust is essential.
In theory, the proposed amendments to the Bank Resolution Ordinance could have been used to bring much-needed discipline to Bangladesh’s financial sector. But in practice, they appear to be a thinly veiled strategy for political and economic retribution, reminiscent of reiderstvo tactics seen in Russia and beyond.
If Bangladesh continues down this path, it risks trading one form of cronyism for another—eroding the very foundations of an independent financial system and turning its banks into tools of political expediency.
