BB appoints observer to Islami Bank board

Bangladesh Bank has appointed an observer to the board of Islami Bank Bangladesh PLC amid growing liquidity pressure and a surge in withdrawals driven by public concern and loss of confidence.

The central bank on Wednesday appointed Executive Director Mohammad Ashraful Alam as the observer, citing powers under Section 49(1)(gha)(a) of the Bank Company Act.

According to Bangladesh Bank sources, the observer will closely monitor the overall activities of the bank, safeguard its interests, ensure protection of depositors and uphold broader public interest. He will attend board meetings and other relevant proceedings and report necessary observations and information to the central bank.

The central bank said the move is aimed at strengthening stability, governance, transparency and accountability in the banking sector, adding that the appointment would help restore confidence and discipline in Islami Bank’s operations.

Earlier, Bangladesh Bank had removed the bank’s previous chairman and appointed former Deputy Governor Khurshid Alam as chairman. However, he and several senior central bank officials later resigned following administrative changes and internal pressures.

Meanwhile, the bank’s Managing Director Omar Faruk Khan also stepped down before the last working day of Eid holidays. The developments have triggered ongoing protests under a customer forum banner.

Since the start of the agitation on June 1, a large volume of withdrawals has been recorded from the bank, creating liquidity pressure. Islami Bank has reportedly sought a special loan of Tk 10,000 crore from Bangladesh Bank to address the situation.

TZ