Islami Bank Bangladesh PLC has sought Tk10,000 crore in special liquidity support from Bangladesh Bank after more than Tk6,000 crore was withdrawn from the bank over seven working days amid protests over the appointment of its new chairman and growing concerns among depositors.
A letter signed by the bank’s Chief Financial Officer Mohammad Abdur Rahim was sent to Bangladesh Bank Governor Md Mostaqur Rahman on Tuesday, seeking support to cope with mounting cash withdrawals by customers, according to sources familiar with the matter.
Bangladesh Bank Assistant Spokesperson Mohammad Shahriar Siddiqui told TIMES, “Islami Bank has requested Tk10,000 crore from the central bank. However, no decision has yet been taken on the matter.”
A central bank source said the proposal is currently under review by the governor and other senior officials.
According to multiple Islami Bank sources, the bank’s deposits declined by Tk4,204 crore between June 1 and June 7. Customers withdrew another Tk2,000 crore over the following two days, taking the total decline to more than Tk6,000 crore by June 9.
A senior Islami Bank official, speaking on condition of anonymity, told TIMES that withdrawal pressure has intensified in recent days.
“Deposits declined by around Tk1,000 crore per day over the past two days. The growing withdrawal pressure has created a cash shortage for the bank,” the official said.
He added that some ATM booths and branches have struggled to meet customers’ cash demands.
The latest turmoil began after the resignation of Islami Bank Chairman M Zubaidur Rahman on the last working day before Eid. Rahman had been serving as an independent director nominated by Bangladesh Bank.
Later that night, Bangladesh Bank appointed former deputy governor Md Khurshid Alam as the bank’s new chairman.
Since then, the Jamaat-e-Islami-backed Islami Bank Conscious Customers Forum has been holding demonstrations at the bank’s head office in Dilkusha and at branches across the country, calling for the removal of the newly appointed chairman.
On Tuesday, protesters observed their ninth consecutive day of demonstrations outside the head office. More than a hundred women joined the programme alongside male protesters. Participants expressed concerns over the safety of their deposits and the future governance of the bank.
The protesters have also demanded the reinstatement of former Managing Director Omar Faruk Khan, the removal of controversial individuals from the board, the repeal of Section 18(a) of the Bank Resolution Act and legal action against those responsible for alleged looting of banks.
Once regarded as the country’s strongest Shariah-based lender, Islami Bank fell into deep financial distress over the past decade following allegations of excessive lending and control by S Alam Group.
Although the bank came out of the conglomerate’s control after the political transition of August 2024, it has yet to fully recover from its large volume of non-performing loans and persistent liquidity pressures.
Bangladesh Bank had previously extended various forms of liquidity support to keep the bank operational, and the lender had gradually shown signs of stabilisation. However, the latest wave of deposit withdrawals has pushed the country’s largest private-sector Shariah bank into a fresh crisis.
