BB dissolves Islami Bank board

Bangladesh Bank on Sunday dissolved the entire board of directors of Islami Bank Bangladesh PLC, including its chairman, citing the interests of depositors, financial stability and public interest.

In a statement, the central bank said it exercised its authority under Sections 45 and 47(3) of the Bank Company Act, 1991 to cancel the appointments of all directors of the country’s largest private commercial bank.

Bangladesh Bank Executive Director Mohammad Zahir Hossain has been appointed to exercise all powers and perform all responsibilities of the board under the relevant provisions of the law.

The decision came amid growing unrest surrounding the bank’s leadership and mounting liquidity pressure caused by large-scale deposit withdrawals. Earlier in the day, senior Islami Bank officials, including Acting Managing Director Altaf Hossain, met Bangladesh Bank Governor Mostakur Rahman to brief him on the bank’s financial condition, liquidity situation and recent developments.

The bank has been facing a crisis of confidence since the appointment of former Bangladesh Bank Deputy Governor Mohammad Khurshid Alam as chairman on May 24, following the resignation of Professor M Jubayedur Rahman.

The appointment triggered protests by a section of the bank’s employees, shareholders and customers.Demonstrations under the banner of the Islami Bank Conscious Customers Forum have continued for more than a week outside the bank’s head office in Motijheel, with protesters threatening to lay siege to Bangladesh Bank on Tuesday if their demands are not met.

To ease liquidity pressure caused by heavy deposit withdrawals, Bangladesh Bank recently provided Tk 2,500 crore in emergency financial support to the bank.