The Association of Bankers, Bangladesh (ABB) has welcomed Bangladesh Bank’s decision to dissolve the board of directors of Islami Bank Bangladesh, including its chairman, saying the move could help restore stability and confidence at the bank.
In a statement issued on Monday from ABB Chairman and City Bank MD Mashrur Arefin’s office, the bankers’ body said it had expressed deep concern to the Bangladesh Bank governor on 10 June, citing the issue’s political overtones and the bank’s systemic importance.
ABB said it had conveyed that an early resolution would benefit the industry because developments at Islami Bank were no longer confined to a single institution and their impact was being felt across the banking sector.
The association had also advised that efforts be made to resolve the issue through dialogue and consensus among relevant stakeholders.
ABB said, “In this context, we believe the decision taken yesterday by the central bank is commendable. We hope it will restore stability at Islami Bank and rebuild the confidence of its depositors, investors and stakeholders.”
Islami Bank’s stability was directly linked to the stability of the broader economy, due to its nearly 30 million customers, large deposit and investment base, the country’s largest remittance network and its major role in international trade finance.
“The stability of Islami Bank is not merely its own concern. It is directly linked to the stability of our overall economy.”
The association also said recent “mob-driven protests” had created deep concerns among bankers regarding the bank’s governance, liquidity and the confidence of depositors and foreign investors.
It believed the central bank’s decision would help allay those concerns.
It expected substantial progress at the bank in terms of good governance, accountability, a banking environment free from political influence and the recovery of its large volume of non-performing loans.
The association also said mob influence in the banking sector was “an ominous signal” for the industry and urged the government to treat the matter with the utmost seriousness.
