A three-way battle for control of Islami Bank Bangladesh, the country’s largest Shariah-based bank, has erupted into the open, exposing one of the most intense power struggles currently unfolding in the country’s financial sector.
At the centre of the conflict are competing efforts by Jamaat-e-Islami to reassert its influence over the bank, attempts by the government to block that return, and what insiders describe as a desperate effort by the S Alam Group to regain control after dominating the institution between 2017 and 2024.
The latest confrontation unfolded publicly on Monday, when protesters – under the banner of the “Islami Bank Conscious Customers Forum” – staged day-long demonstrations in front of Islami Bank Tower in Dilkusha, Motijheel aimed at preventing newly appointed chairman Khurshid Alam from entering office and demanding his resignation.
Several demonstrators identified as holding the rank of “Rukon” within Jamaat-e-Islami were seen among the protesters.
Multiple demonstrators told TIMES of Bangladesh that they had gathered with activists “following organisational instructions from Jamaat” and intended to continue the protest throughout the day.
“We have been demonstrating in front of Islami Bank since 9am following instructions from the organisation. Attendance is comparatively lower as it is immediately after Eid,” a ward-level ameer of Jamaat’s Dhanmondi branch, told TIMES of Bangladesh during the protest.
Police played an active role in dispersing the demonstrations, using tear gas shells and water cannons several times against protesters. Several people were injured during the clashes.
Jamaat-e-Islami later issued a statement strongly condemning the police action.
The unrest forced the postponement of a previously scheduled board meeting of the bank.
As Khurshid Alam was unable to reach the headquarters, Islami Bank authorities sought permission from Bangladesh Bank to hold the meeting virtually. However, protesters later entered the headquarters and applied pressure on officials, resulting in the cancellation of the virtual meeting as well.
“Respecting the demands of the customers, the board meeting was not held online either,” Islami Bank Acting Managing Director Altaf Hossain told reporters.
Beside the resignation of newly appointed chairman, the protesters also demanded the reinstatement of suspended Managing Director Omar Faruk Khan, the resignation of Bangladesh Bank Governor Md Mostaqur Rahman, the confiscation and sale of S Alam Group’s shares, and the return of the bank to those who controlled it before the S Alam takeover.
Around 40 to 50 protesters were also seen gathering outside Khurshid Alam’s residence in the Bashundhara area of the city later in the day.
Following a day of tensions and rapid developments, the board meeting was finally held virtually at 9:00 pm and lasted for about 40 minutes. All board members attended the session.
An independent director of the bank, speaking to TIMES on condition of anonymity, said the meeting began with the recitation of the Holy Quran, in line with the bank’s usual boardroom practice.
The director said the board discussed the scheduled agenda items and unanimously accepted the resignation of Managing Director Omar Faruk Khan.
Bangladesh Bank spokesperson Arief Hossain Khan defended the appointment of the new chairman, saying the central bank’s decision was appropriate.
“The decision to appoint the chairman of Islami Bank was correct,” he said.
“The protest issue does not fall under Bangladesh Bank’s jurisdiction. That will be handled by the law enforcement agencies.”
Hinting at Jamaat-e-Islami for instigating the protest, he said, “No bank can belong to any political party. But from the activities of the protesters, it appears to us that there is an attempt to turn Islami Bank into an affiliated organisation of a particular political party.”
Tensions surrounding the bank began escalating on 24 May, the final working day before the Eid holidays.
On that day, Islami Bank chairman Zubaidur Rahman submitted his resignation letter to Bangladesh Bank, while Managing Director Omar Faruk Khan separately submitted his resignation to the board.
Later that night, at around 9pm, Bangladesh Bank appointed former deputy governor Khurshid Alam as the new chairman of the bank.
Protests had already erupted outside Islami Bank earlier that day, with rival groups taking opposing positions.
One group demanded the resignation of interim government-appointed chairman Zubaidur Rahman and called for the reinstatement of Omar Faruk Khan, who had been placed on compulsory leave.
Another group demanded Omar Faruk Khan’s resignation.
A board meeting had been scheduled for that day to decide on Omar Faruk Khan’s resignation letter. However, amid the protests and the chairman’s resignation, the meeting was postponed.
The meeting was later rescheduled for the first working day after the Eid holidays.
Khurshid Alam had previously been forced to resign as deputy governor of Bangladesh Bank on 7 August 2024 following protests by central bank officials demanding the removal of several senior figures.
He was also associated with the pro-BNP organisation Zia Parishad and served as a member of the election management committee for Prime Minister Tarique Rahman’s Dhaka-17 constituency during the 13th parliamentary election.
His appointment triggered a strong backlash from Jamaat-aligned groups and a section of the bank’s officers and employees, who fear the move could mark a repeat of the controversial 2017 takeover of Islami Bank.
People familiar with the developments say the movement led by the Jamaat-aligned customer forum is not limited to opposing the appointment of Khurshid Alam. Behind the protests lies a broader effort to re-establish long-standing influence over Islami Bank.
The group became increasingly active both inside and outside the bank immediately after the fall of Sheikh Hasina’s government on 5 August 2024.
Whether Islami Bank is effectively linked to Jamaat-e-Islami has long been a subject of political debate in Bangladesh.
On 29 December 2024, Jamaat chief Shafiqur Rahman told a public rally, “Jamaat did not seize Islami Bank. The bank has returned to its mother’s lap.”
Yet less than a year later, on 28 October 2025, the party’s Secretary General Mia Golam Parwar publicly stated that Jamaat had “no connection” with the bank.
Documents suggest that at the time of its establishment, around 70 per cent of Islami Bank’s investment came from foreign institutions, while Bangladeshi stakeholders held the remaining 30 per cent.
Of that domestic share, 5 per cent belonged to the government, 10 per cent came through an initial public offering on the stock market, and 15 per cent was controlled by local private sponsors.
Insiders say Jamaat-e-Islami did not initially hold formal control over the institution. However, from the 1990s onward, the influence of Jamaat-aligned figures gradually expanded within the bank’s board and management structure, eventually giving the party effective control.
That influence suffered a major setback on 5 January 2017.
Photo: Syed Mahamudur Rahman/ TIMES
Under the Awami League government, and in what critics described as a dramatic takeover operation aimed at removing Jamaat’s influence, the S Alam Group seized control of the bank.
On that day, officials from the Directorate General of Forces Intelligence reportedly picked up the then chairman, a vice-chairman and the managing director from their homes and pressured them into resigning.
From 2017 until 2024, the bank remained under the dominance of the S Alam Group.
Internal investigations later alleged that the group siphoned off nearly Tk75,000 crore from the bank through loans, accounting for at least half of Islami Bank’s total outstanding lending portfolio.
Following the political transition of 5 August 2024, the S Alam Group’s control structure inside the bank began to collapse rapidly.
However, several Islami Bank officials say the group’s influence has not disappeared entirely despite losing direct control.
On 22 August 2024, Bangladesh Bank dissolved the bank’s board and appointed five independent directors. Around the same time, the central bank froze 82 per cent of Islami Bank’s shares.
Even so, officials fear the group could still attempt a comeback through thousands of employees appointed during the S Alam era, frozen shareholdings, pending court petitions, political connections and protests by dismissed staff members.
