Islami Bank Seeks Tk 10,000cr Loan from Bangladesh Bank Amid Liquidity Crunch

Due to unrest over the appointment of its chairman, withdrawals from Islami Bank Bangladesh PLC (IBBPLC) have risen significantly above normal levels in recent days, pushing the bank into a liquidity crunch. To address the situation, the bank on Monday sought a special loan of Tk 10,000 crore from Bangladesh Bank.

According to sources at Islami Bank, withdrawals exceeded deposits by around Tk 4,300 crore during the six working days after Eid up to Monday, far higher than usual. Bank officials believe that a section of customers has been withdrawing funds amid the ongoing unrest.

Islami Bank has been facing a series of challenges since 2022 due to widespread irregularities and corruption. Following the fall of the Awami League government in August 2024, Bangladesh Bank intensified efforts to restore good governance at the bank.

Recently, a group launched a movement under the banner of the Islami Bank Customer Forum following the appointment of former Bangladesh Bank Deputy Governor Khurshid Alam as chairman. The movement began on June 1, with the forum demanding the cancellation of his appointment.

The forum alleges that Khurshid Alam was involved in corruption during his tenure at Bangladesh Bank and was forced to resign following protests by central bank officials after the fall of the Awami League government.

Sources said the bank has once again failed to maintain the required Cash Reserve Requirement (CRR) with Bangladesh Bank due to the surge in deposit withdrawals. As a result, it has applied for a special loan from the central bank.

An Islami Bank official said the bank still has funds in its account with Bangladesh Bank, but sought central bank support as a precautionary measure and to address the CRR shortfall. He added that the bank's current account balance, which previously stood at more than Tk 7,015 crore, has now fallen to around Tk 2,600 crore.

Islami Bank has been under the control of the S Alam Group since 2017. The bank's board was reconstituted during the interim government period. More recently, its former chairman and managing director were compelled to resign.

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