Bangladesh Bank has signalled that it is preparing a support package for Islami Bank Bangladesh PLC, with Governor Md Mostaqur Rahman promising liquidity assistance and new intervention measures to reassure depositors following weeks of withdrawals and uncertainty surrounding the bank.
Speaking at the post-budget press conference held at the capital’s Osmani Memorial Auditorium on Friday, the governor said the central bank would deploy additional tools within days to stabilise the situation and ensure that depositors retain uninterrupted access to their funds.
“Bangladesh Bank has some tools. We will apply them within the next few days,” Rahman said. “Depositors will face no difficulties. They will be able to withdraw their money whenever they want.”
The remarks represent the strongest indication yet that the central bank is preparing to intervene more actively in support of the country’s largest Islamic bank, which has come under pressure following controversy surrounding the appointment of its new chairman and the subsequent withdrawal of deposits by customers.
The governor also confirmed that Bangladesh Bank stands ready to provide emergency liquidity support if necessary.
“For Islami Bank, we will provide whatever emergency liquidity support is required,” he said.
The assurances come at a critical moment for the bank.
According to the governor, Islami Bank’s advance-deposit ratio (ADR) has risen from 93 percent in July 2024 to 97 percent currently, significantly above the regulatory ceiling of 92 percent.
“We have instructed the management to bring it down,” he said.
The sharp increase in the ratio points to growing liquidity pressure as deposits leave the bank faster than loans can be adjusted.
The deterioration follows weeks of tension triggered by changes in the bank’s leadership.
After former Bangladesh Bank deputy governor Khurshid Alam was appointed chairman, Jamaat-e-Islami-backed groups launched protests demanding his removal. The dispute fuelled fresh concerns among some depositors and contributed to increased withdrawals from branches across the country.
The situation became serious enough for Islami Bank to seek Tk10,000 crore in special liquidity support from Bangladesh Bank, according to officials familiar with the matter.
The central bank has yet to announce a decision on that request.
Rahman also sought to explain Bangladesh Bank’s recent actions at the bank amid allegations of regulatory interference.
He said Islami Bank had been operating under a five-member board since the interim government’s tenure and that one director was later replaced following complaints of irregularities.
When the chairman resigned before Eid, Bangladesh Bank had to act quickly because a systemic bank could not operate without the minimum number of directors required under regulations.
“Since it is a systemic bank, we had to appoint someone immediately,” he said.
The governor stressed that Bangladesh Bank’s intervention had been limited.
“We found a board. One director was replaced because of allegations of irregularities. Beyond that, we have not done anything,” he said.
Earlier this week, Bangladesh Bank appointed Executive Director Mohammad Ashraful Alam as an observer at Islami Bank as concerns mounted over governance, liquidity and depositor confidence.
The governor said stabilising the institution remains a priority for the regulator.
