The ongoing turmoil at Islami Bank Bangladesh PLC is beginning to have a negative impact on the country’s banking industry and should be resolved quickly through dialogue, Association of Bankers Bangladesh (ABB) Chairman and City Bank Managing Director Mashrur Arefin said on Wednesday.
Speaking to reporters after a bankers’ meeting at Bangladesh Bank headquarters, Arefin said the uncertainty surrounding the country’s largest bank had become a matter of concern for the entire sector.
Bankers extensively discussed the Islami Bank situation with Bangladesh Bank Governor Md Mostaqur Rahman. The meeting also reviewed a proposed Tk60,000 crore financing programme to revive private sector credit growth, plans for a nationwide rollout of Bangla QR and the expansion of TakaPay.
“What is happening at Islami Bank has started to create a significant negative impact on the industry. We want the two sides to reach a settlement quickly,” Arefin said.
According to Arefin, the governor briefed bankers on the latest developments, expressed optimism that a solution could be reached soon and said the issue had taken on a political dimension.
“We are hopeful that a solution will emerge. The governor appeared very firm today and we believe a way forward can be found,” he said.
The meeting also discussed the proposed Tk60,000 crore financing programme aimed at reviving private sector credit growth, which has remained sluggish in recent months.
“Credit growth is one of our biggest concerns. The governor also wants credit growth to improve, which is why this package is being introduced,” Arefin said.
Under the proposed scheme, Bangladesh Bank is expected to provide part of the funding, with the remainder coming from commercial banks. The facility is expected to target small, micro and medium-sized businesses. Arefin said banks had already shared their views on how funds could be mobilised, noting that a significant portion of sector liquidity is currently invested in treasury bills and bonds.
Another major topic was the nationwide rollout of Bangla QR, the country’s interoperable QR-based payment platform. Arefin said all banks would launch a coordinated promotional campaign from 1 July through billboards, social media and other communication channels.
“We will jointly promote Bangla QR across the country and thousands of QR codes will be installed by banks,” he said.
Bankers also discussed merchant discount rates, interchange fees and revenue-sharing arrangements, as well as plans to expand TakaPay, the country’s domestic card payment network.
“We should have our own sovereign debit and credit card network. A local credit card platform would reduce the fees banks currently pay to international card operators on every transaction,” Arefin said.
The meeting also focused on improving trade-related data submitted by banks, concerns over import pricing, including possible over-invoicing and under-invoicing, and a proposal to allow limited virtual participation in board meetings. Arefin said the proposal received a positive response.
Responding to a question about Section 18(a) of the Bank Resolution Act, he said the provision was being withdrawn and noted that the governor had publicly opposed it. He also said he was unaware of any politically influenced lending decisions.
“It was an excellent meeting. We had open and constructive discussions on almost all major issues facing the banking sector,” he said.
