Facing an intense cash crunch triggered by a surge in deposit withdrawals, Islami Bank Bangladesh PLC (IBBPLC) received Tk 25 billion in emergency liquidity support from Bangladesh Bank (BB) just days after seeking a much larger Tk 100 billion bailout.
Central bank sources confirmed the funds were released on Sunday in a move aimed at preventing further stress on the bank’s cash position and ensuring uninterrupted customer withdrawals.
Officials say the support is a short-term stabilisation measure as withdrawal pressure continues to build. Bangladesh Bank is closely monitoring the situation, with the option of additional support still on the table if the outflow persists.
On the other hand the IBBPLC’s senior bankers after hours long meeting with BB governor told the media on the day that the bank’s current net liquidity shortage around Tk12 billion and in the mean time their inflow is good.
The IBBPLC acting managing director Md Altaf Hossain led the team of meeting with the governor.
He said, “We had discussions on solving problems and the government has given us few directions.”
“Hopefully we will recover soon”
The urgency of the situation is reflected in recent withdrawal data. Between June 1 and June 9, customers pulled out nearly Tk 60 billion from the bank. Internal figures show Tk 4,204 crore was withdrawn in just the first seven days, followed by another Tk20 billion in the next two days alone-an acceleration that created visible cash shortages at several branches and ATM booths.
The bank formally sought Tk 100 billion in special liquidity support last week through a letter signed by its Chief Financial Officer, citing an immediate need to meet depositor demand.
Banking insiders say the withdrawal spike is closely tied to a growing confidence deficit, fuelled by recent leadership changes and ongoing protests. On May 24, just ahead of Eid-ul-Azha, Chairman M. Zubayer Rahman stepped down. Within hours, former Bangladesh Bank Deputy Governor Khurshid Alam was appointed as the new chairman"an abrupt transition that triggered unease among sections of depositors.
Since then, protests under the banner of the “Islami Bank Conscious Customers Forum” have continued at the bank’s Dilkusha headquarters and across branches, demanding governance changes and raising questions over the bank’s direction. The unrest has further amplified depositor anxiety, accelerating withdrawals.
Analysts say the current situation goes beyond a liquidity mismatch and reflects a deeper trust crisis. While central bank funding can temporarily ease cash shortages, it does little to address underlying concerns about governance, asset quality, and institutional stability.
The bank’s vulnerabilities have been building over time. Once the country’s largest Shariah-based lender, Islami Bank has been weakened over the past decade by controversial ownership shifts, aggressive loan disbursement, and a mounting burden of non-performing loans. Although it exited S Alam Group’s control after the 2024 political transition, its balance sheet remains under strain.
With withdrawals still elevated and confidence yet to stabilise, the effectiveness of the current support will depend largely on whether the bank-and regulators-can restore trust before liquidity pressure resurges.
