The country’s largest private commercial bank, Islami Bank Bangladesh PLC, has faced a major liquidity crisis in the face of massive deposit withdrawals due to a lack of confidence over the appointment of its chairman.
Bangladesh Bank has provided the bank with an emergency assistance of Tk 2.5 trillion to deal with the emerging situation.
Bangladesh Bank Executive Director and Spokesperson Md. Arif Hossain Khan confirmed the matter on Sunday (June 14). Sources said that out of the total amount of assistance, Tk 2,000 crore has been provided as cash liquidity assistance. In addition, an additional Tk 500 crore has been provided to keep the Real Time Gross Settlement (RTGS) service, an important platform for inter-bank transactions, operational.
Withdrawals of around 5,000 crore taka in a week
The recent change in top leadership of Islami Bank has created concern and distrust among customers. Since the appointment of former Bangladesh Bank Deputy Governor Md. Khurshid Alam as the new chairman, a section of the bank’s officers, employees, shareholders and customers have been expressing dissatisfaction.
This has a direct impact on deposit management. According to sources, customers have withdrawn about 5,000 crore taka from the bank in the last one week. As a result, the bank’s liquidity management is under pressure and there are complications in conducting daily transactions.
CRR has decreased to Rs 2,600 crore
According to the provisions of Bangladesh Bank, banks are required to maintain a certain amount of money as Cash Reserve Ratio (CRR). According to the information provided by the concerned officials, before the change of chairman, Islami Bank had a surplus CRR. While the bank’s CRR was supposed to be around 7,000 crore taka, due to the pressure of deposit withdrawal, it has now come down to around 2,600 crore taka.
In addition, the bank’s current account balance with the central bank has also decreased significantly. To cope with the situation, Islami Bank applied for special liquidity support of Tk 10,000 crore from Bangladesh Bank. As part of that, Tk 2,500 crore has been provided in the initial stage.
Why has this instability arisen?
On May 24, the chairman of Islami Bank, Professor M. Zubaidur Rahman, resigned. On the same day, former deputy governor Md. Khurshid Alam was appointed as the new chairman. However, since this appointment, the bank has faced protests and agitations.
The protesters, under the banner of ‘Islami Bank Conscious Customer Forum’, are holding a protest in front of the bank’s head office in Motijheel. They allege that appointing a controversial person as chairman may hinder the bank’s reform efforts. They have also announced a protest against Bangladesh Bank if their demands are not met.
Bangladesh Bank’s position
Meanwhile, at the proposed post-budget press conference for the 2026-27 fiscal year, Bangladesh Bank Governor Md. Mostaqur Rahman said that the government or the central bank did not interfere in the activities of the Islamic Bank.
He said that one of the five-member board members formed during the interim government was replaced on March 16 after allegations were raised against him. Bangladesh Bank has not given any instructions regarding the transfer or promotion of anyone else. He commented that the various rumors circulating on social media also have no factual basis.
Central Bank monitoring the situation
Bangladesh Bank is closely monitoring the situation to maintain the stability of the banking sector and protect the interests of depositors. According to experts, prolonged instability in large financial institutions like Islamic banks can affect the entire banking sector. Therefore, restoring confidence and ensuring normal operations is the biggest challenge now.