New administrator says Islami Bank to get neutral board as it receives another Tk2,500cr
Islami Bank has not yet had to use the Tk2,500 crore in liquidity support it received from Bangladesh Bank yesterday, says Md Altaf Hossain.
Highlights:
- Islami Bank receives Tk2,500cr in fresh liquidity support from BB
- Bank received Tk2,500cr in liquidity support yesterday
- Acting MD says yesterday's funds have not yet been used
- Management hopes depositor confidence will improve, withdrawn funds will return
- BB dissolved Islami Bank's board amid severe liquidity crisis, deposit outflows
- Administrator says efforts underway to form 'completely neutral' new board
- Assures customers that banking operations will continue without disruption
Acting managing director of Islami Bank Md Altaf Hossain has said the bank received another Tk2,500 crore in liquidity support from the central bank today (15 June).
"We also received Tk2,500 crore in liquidity support from Bangladesh Bank yesterday. We have not yet had to use the funds received yesterday," he told reporters.
Keep updated, follow The Business Standard's Google news channel
Altaf said he hopes that customers who have withdrawn their deposits will regain confidence in the bank and return.
The acting chief said the bank is already seeing signs of improving customer confidence.
"We have just received information from one of the bank's major branches showing that the number of account closures has fallen by 75% compared to previous levels," he said.
Bangladesh Bank yesterday dissolved the board of Islami Bank Bangladesh, including Chairman Md Khurshid Alam, as the bank grappled with an acute liquidity crisis fuelled by deposit flight and growing uncertainty among customers.
To stabilise the situation, the regulator appointed its executive director, Mohammad Zahir Hussain, as administrator of the country's largest shariah-based bank.
A group of Islami Bank customers today welcomed the decision to dissolve the bank's board of directors, urging the central bank to swiftly appoint a new board comprising competent, credible and politically neutral individuals.
Under the banner of the "Islami Bank Sachetan Grahok Forum," they congratulated Bangladesh Bank on the move and called for the restoration of sound governance at the bank.
They also urged the regulator to reconstitute the board with experienced individuals who were involved in the bank's management before its takeover by the S Alam Group, saying that such a move will help rebuild depositor confidence and strengthen the institution's governance framework.
Newly appointed Islami Bank administrator Zahir said today that efforts are underway to form a "completely neutral" board to strengthen governance and restore depositor confidence.
Speaking after assuming charge, he said his appointment is for a limited period and assured customers that banking operations and transactions will continue uninterrupted, urging them to carry on their banking activities without concern.
The crisis emerged quickly after Bangladesh Bank appointed former deputy governor Khurshid Alam as chairman of Islami Bank on 24 May, just hours after the previous chairman stepped down and immediately before the start of a week-long Eid-ul-Adha holiday.
The move raised swift concerns among stakeholders.
Following the holidays, protests broke out on 1 June outside the bank's Motijheel head office in Dhaka, where demonstrators under the banner of the Islami Bank Sachetan Grahok Forum demanded cancellation of Khurshid's appointment.
