Islami Bank Bangladesh’s interim Chairman, Mohammad Zahir Hossain, has urged depositors to continue their banking activities with confidence following nearly two weeks of uncertainty surrounding the country’s largest Shariah-based lender.
Speaking at a press briefing after assuming office, Zahir called on customers to maintain their trust in the bank and conduct transactions without hesitation. He said efforts were underway to establish a new board of directors as quickly as possible in order to ensure stable governance and uninterrupted operations.
According to Zahir, a five-member board is currently being formed through a vetting process designed to ensure that its members are qualified, professional and politically neutral. He expressed optimism that customers would soon see a balanced and independent board capable of managing the institution effectively.
Zahir, an executive director of Bangladesh Bank, is presently serving as a one-member board on a temporary basis to oversee the bank during the transition period.
The developments follow a decision by Bangladesh Bank on Sunday night to dissolve the entire board of directors of Islami Bank. The move came amid large-scale deposit withdrawals, public protests and political controversy linked to the appointment of former Bangladesh Bank Deputy Governor Md Khurshid Alam as chairman of the bank.
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Protesters Welcome Board Dissolution
The Conscious Customers Forum, which has been protesting against Khurshid Alam’s appointment since 1 June, described the central bank’s intervention as an “initial victory”.
Speaking at a separate briefing, forum representative Nur Nabi Manik presented a seven-point demand. The demands include the immediate formation of a full board comprising honest, competent and professional individuals through consultation, the reinstatement of former Managing Director Md Omar Faruk, and the return of shares allegedly taken from previous owners.
The forum announced that it would submit a memorandum outlining its demands to the Governor of Bangladesh Bank.
However, Zahir stated that Omar Faruk could not be reinstated because his resignation had already been accepted.
“As his resignation has been accepted, there is no scope for bringing him back,” he said.
Liquidity Support and Depositor Response
Despite continued crowds at several branches, Acting Managing Director Md Altaf Hossain said withdrawal pressure had eased compared with previous days.
To help the bank meet customer demand for cash withdrawals, Bangladesh Bank provided an additional Tk 2,500 crore in liquidity support. According to bank officials, the full amount was not required, suggesting some easing of immediate pressure.
Hossain also said confidence appeared to be gradually returning among customers. He noted that account closures at a major branch had fallen by approximately 75 per cent, indicating a reduction in panic-driven withdrawals.
Key Developments
| Issue | Details |
|---|---|
| Interim Chairman | Mohammad Zahir Hossain |
| Proposed New Board | Five members |
| Board Dissolved | Sunday night |
| Additional Liquidity Support | Tk 2,500 crore |
| Protests Began | 1 June |
| Forum Demands | Seven-point programme |
| Reopening Eligibility | Accounts closed between 1–15 June |
| Reopening Window | Within seven working days |
Measures to Restore Normal Operations
The bank has instructed branches to reactivate certain deposit accounts that were closed or encashed before maturity. The initiative is intended to improve cash flow and support a return to normal banking operations.
In an internal circular issued on Monday, the bank stated that the recent situation had caused many customers to become inactive, resulting in the closure or dormancy of several categories of deposit accounts, including MTDR (Mudaraba Term Deposit Receipt), MSB, MMPDS and MSS accounts.
Customers whose accounts in these categories were closed between 1 June and 15 June will be permitted to reopen them within the next seven working days upon application. Once reactivated, the accounts will regain all normal operational facilities.
The bank has also instructed all divisions, zones and branches to contact affected customers through mobile phones and other available channels and encourage them to resume transactions.
Banking Sector Response
The Association of Bankers, Bangladesh (ABB) welcomed the central bank’s decision to dissolve the Islami Bank board and facilitate a fresh start for the institution.
In a statement, ABB Chairman Mashrur Arefin described the decision as timely and prudent. He said the association had raised concerns with the central bank governor on 10 June because the issue had acquired political significance and involved a systemically important financial institution.
ABB stated that the situation had extended beyond a single bank and was affecting confidence across the wider banking sector. The association expressed hope that the central bank’s intervention would help restore stability, rebuild depositor and investor confidence, strengthen governance and accountability, reduce political influence in banking, and support the recovery of defaulted loans.