Depositors stage protests at 2 Islamic banks in Khatunganj, demand withdrawal of ‘haircut’ proposal
Under directives from Bangladesh Bank, Union Bank PLC and First Security Islami Bank are currently operating under a coordinated structure involving five Islamic banks.
Depositors staged protests at branches of Union Bank PLC and First Security Islami Bank in Chattogram's Khatunganj today (3 May), demanding the return of their savings and the withdrawal of a proposed "haircut" on deposits.
More than 100 customers entered the Union Bank branch at around 10am, when the bank opened, and held a sit-in demanding access to their deposited funds.
Later, from 11:30am to 1pm, customers held a similar demonstration at the nearby First Security Islami Bank branch.
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Kotwali police were deployed at the scene and tried to calm the protesters.
Under directives from Bangladesh Bank, Union Bank PLC and First Security Islami Bank are currently operating under a coordinated structure involving five Islamic banks.
Protesters said they have been demanding for a long time that the proposed "haircut" be scrapped, normal banking transactions restored and their deposited money returned, but no effective solution has yet been provided.
Notably, a "haircut on deposits" is a term used to describe the reduction in the value of bank deposits during a banking crisis or debt restructuring process.
One aggrieved customer alleged that despite having more than Tk1 crore in his account, he has been unable to withdraw even a small amount when needed.
He claimed repeated communication with bank authorities has yielded no solution.
Another protester said, "Now we regret keeping our money in the bank, and we are not receiving the support we expected from any guardian or from the government. Keeping money in the bank has become a crime for us.
"I deposited all my savings here, and now it has become impossible to manage my family's daily expenses. The foundation of banking is trust and confidence, but in the case of Union Bank, that trust has completely collapsed."
Bank officials, however, said large withdrawals cannot be allowed without instructions from the central bank or their head offices.
In line with Bangladesh Bank's directives, customers are currently allowed to withdraw a maximum of Tk2 lakh, they added.
The deadlock in banking operations has created uncertainty among traders and general depositors. Parties concerned say quick and effective intervention by the central bank is needed to restore normalcy.
