The central bank of Bangladesh has once again provided substantial liquidity assistance to one of the country’s largest private financial institutions, Islami Bank Bangladesh PLC, in response to mounting pressure from increased customer withdrawals.
According to official sources, the bank has been granted an additional BDT 2,500 crore in special liquidity support as depositors intensified cash withdrawal demands in recent weeks. The measure follows an earlier decision to extend a similar amount of financial assistance, which was deemed insufficient as liquidity stress persisted. Initially, the bank had reportedly sought support of nearly BDT 10,000 crore to stabilise its operations amid growing withdrawal pressure.
Data from the central bank indicates that during the first nine days of June alone, customers withdrew approximately BDT 6,000 crore from Islami Bank Bangladesh PLC. In the first seven days, deposits fell by around BDT 4,204 crore, followed by a further withdrawal of nearly BDT 2,000 crore over the next two days. This sustained outflow created significant pressure on branch-level cash availability and ATM operations across the country.
In response, Bangladesh Bank initiated close monitoring of the institution’s financial condition and operational liquidity. Officials held a series of high-level meetings with senior management of the bank to assess the situation and determine appropriate corrective measures. During these discussions, assurances were given that emergency liquidity support would be provided if required to safeguard depositor interests and maintain financial stability.
Subsequently, the central bank implemented stringent administrative measures under the Banking Companies Act, 1991. The entire board of directors of the bank, including the chairman, was removed from their positions. Operational control was temporarily handed over to an executive director appointed by the central bank to ensure continuity of governance and restore confidence in the institution.
The central bank stated that the primary objectives of these interventions are to strengthen the bank’s governance structure, protect depositors’ funds, and ensure uninterrupted banking services. It also emphasised that further liquidity support may be considered if required to stabilise operations and maintain confidence in the banking system.
Islami Bank Bangladesh PLC has acknowledged that the recent wave of withdrawals has placed significant strain on its liquidity management. However, the bank also noted that support from the central bank has played a crucial role in easing immediate operational pressures and ensuring continued service delivery.
Summary of Liquidity Support and Withdrawals
| Period | Event | Amount (BDT crore) |
|---|---|---|
| Initial phase | First liquidity support approval | 2,500 |
| Subsequent decision | Additional liquidity support | 2,500 |
| 1–9 June | Total customer withdrawals | 6,000 |
| 1–7 June | Deposit reduction | 4,204 |
| Following 2 days | Additional withdrawals | 2,000 |
Financial analysts suggest that the situation underscores the critical importance of liquidity management within the banking sector, particularly during periods of heightened depositor uncertainty. They note that rapid intervention by Bangladesh Bank has likely helped prevent further deterioration of stability at Islami Bank Bangladesh PLC. Nevertheless, restoring depositor confidence and normalising cash flow conditions remain key challenges in the near term.