Islamic Bank, a private sector bank, is facing a severe liquidity crisis and has requested a loan of 10,000 crore from Bangladesh Bank. The bank has seen a significant withdrawal of over 5,000 crore in the past week due to ongoing controversies and protests following the appointment of a new chairman. Bangladesh Bank's Assistant Spokesperson Mohammad Shahriar Siddiqi confirmed the loan request but stated that no decision has been made regarding the disbursement of funds.
Sources from Islamic Bank report that deposits have decreased by 4,204 crore from May 31 to June 7, with further reductions in the subsequent two days. The financial instability follows the resignation of the previous chairman, M Zubaidur Rahman, and the appointment of former Bangladesh Bank Deputy Governor, Mohammad Khurshid Alam, as the new chairman. Protests by customers demanding the removal of the new chairman have exacerbated the bank's liquidity issues.
The protesters, supported by Bangladesh Jamaat-e-Islami, are calling for several reforms, including the reinstatement of Omar Faruk Khan as Managing Director, removal of individuals involved in financial irregularities from the bank's board, and the sale of assets owned by S Alam to recover looted funds. The bank was previously taken over by S Alam Group in 2017 through alleged irregular means and has since faced significant financial challenges, with 50% of its loans now classified as non-performing.
