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Islami Bank largely leaderless, major decisions stalled
Published : Wednesday, 12 August, 2026 at 11:32 AM
Observer Online Report
Islami Bank, the country’s largest Islamic bank, has been operating without a full board of directors and a chairman for more than one and a half months. The managing director’s post is also being run on an acting basis.
As a result, the bank is unable to take several major policy decisions, including approving large loans and rescheduling loans. The Bangladesh Bank says the process of forming a new board, including a chairman, is nearing completion.
Once regarded as one of the country’s strongest banks, Islami Bank came under controversy after the S Alam Group took control during the ousted Sheikh Hasina government’s tenure. Controversial lending, governance failures and other irregularities led to a rise in default loans.
The central bank appointed its executive director Zahir Hossain as administrator, but the bank is still unable to take many policy-level decisions. Major investments, restructuring and business planning have consequently remained largely stalled.
Bangladesh Bank spokesperson Arif Hossain Khan said the new board was being formed after careful scrutiny to ensure that no controversy arises over the chairman or its members.
“We are aware that forming the board is very important for the bank,” he said.
The bank has also faced a fresh liquidity crisis in recent years amid controversial lending, an abnormal rise in default loans and declining income.
Banking analysts said the new board should comprise individuals free from political influence to restore customers’ confidence.
Shahidul Jahid, chairman of the Department of Banking and Insurance at Dhaka University, said the board should comprise acceptable individuals who can win the confidence of both depositors and bank officials and free the bank from politics.
Senior officials of Islami Bank declined to comment on whether the prolonged absence of a full board and a regular managing director was affecting the bank’s normal operations.
SKS
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Editor : Iqbal Sobhan Chowdhury
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Published by the Editor on behalf of the Observer Ltd. from Globe Printers, 24/A, New Eskaton Road, Ramna, Dhaka.
Editorial, News and Commercial Offices : Aziz Bhaban (2nd floor), 93, Motijheel C/A, Dhaka-1000.
Phone: PABX- 41053001-06; Advertisement: 41053012; 01793317829, 01550707291, E-mail: [email protected], [email protected] Online: email: [email protected] 41053014; 01550707297 Advertisement: 01550707296
