Founder Azam J Chowdhury to lose controlPrime Bank set to become free from family dominance

Prime Bank, one of the leading private lenders in Bangladesh, is on course to be freed from family influence as its founding director Azam J Chowdhury is poised to lose his three-decade-long grip on the institution.

Bangladesh Bank has recently moved to amend the Bank Companies Act, with the proposed law expected to come into force as an ordinance.

If enacted, the number of directors from the same family in any bank will be reduced from three to two, while board members who have served for more than six consecutive years will have to step down.

This change would effectively end Azam J Chowdhury’s longstanding dominance over Prime Bank, which he has controlled since its inception in 1995.

“The new law will reduce directors’ power and make board structures more balanced,” Bangladesh Bank Governor Dr Ahsan H Mansur told journalists.

Under the planned reforms, 50% of a bank’s board members must be independent directors appointed from a central bank–approved panel. Banks will no longer have the authority to appoint directors solely at their own discretion.

The initiative comes in the wake of sweeping reforms undertaken by the interim government formed after the fall of Sheikh Hasina’s administration on 5 August 2024.

The central bank’s proposal caps the number of directors from the same family at two and mandates the removal of board members serving for more than six consecutive years.

Decades of influence

Azam J Chowdhury, also chairman of East Coast Group, has been a fixture on the Prime Bank board since its launch, serving multiple terms as chairman.

In 2020, he stepped down from the role, handing it to his son and East Coast Group managing director, Tanjil Chowdhury. Currently, Azam J Chowdhury, Tanjil Chowdhury, and Tanveer Chowdhury all sit on the board.

Insiders say that despite not being chairman, Azam J Chowdhury continues to be the key decision-maker, often sitting beside the chairman in board meetings—a symbolic display of his influence.

Across Bangladesh’s 40 private banks, founding families typically hold just over 2.5% of shares, while public deposits account for more than 90%. Yet, entrenched family control often sidelines depositors’ interests in decision-making.

If implemented, the new law will bring sweeping changes to banks long dominated by family-led boards, ensuring more diverse and professional representation.

Experts say the reforms will enhance transparency, accountability, and depositor protection—long-needed measures in the banking sector. “It’s a very good move if applied uniformly,” said Dr Zahid Hossain, former lead economist at the World Bank’s Dhaka office. “Implementation should not be selective—no one should get exemptions.”

Asked for comment, Prime Bank chairman Tanjil Chowdhury said the bank would fully comply with the new law.

“Our board is transparent and participatory. We value the input of all directors, especially independent ones,” he said, adding that governance at Prime Bank is strong and policy decisions are made collectively, not by any single person.