Islami Bank Bangladesh PLC has sought emergency liquidity support of Tk 10,000 crore from Bangladesh Bank following a sharp decline in deposits and mounting pressure on its liquidity position.
According to banking sources, customers withdrew approximately Tk 4,240 crore from the bank within seven working days amid concerns surrounding recent changes in the bank’s leadership. The withdrawals have significantly affected the bank’s cash reserves and overall liquidity management.
Sources said the bank’s Cash Reserve Ratio (CRR), which had previously remained above the regulatory requirement, has fallen substantially due to the continued withdrawal of deposits. While the bank’s required CRR stands at around Tk 7,000 crore, its current reserve has reportedly dropped to approximately Tk 2,600 crore.
The bank is also facing pressure on its current account balance maintained with the central bank, making it increasingly difficult to manage daily transactions and meet customer demand for cash withdrawals. In response, Islami Bank has requested special liquidity assistance from Bangladesh Bank to stabilize its operations.
### Leadership Change Sparks Concern
The latest uncertainty emerged after the resignation of Chairman Professor M. Zubaidur Rahman on May 24. On the same day, former Bangladesh Bank Deputy Governor Md. Khurshid Alam was appointed as the new chairman.
The appointment triggered concerns among sections of the bank’s officers, employees, shareholders and customers. Demonstrations have been held in front of the bank’s head office in Motijheel, with protesters expressing reservations about the leadership change and its potential impact on the bank’s ongoing reform efforts.
However, some members of the board and banking sector observers believe that Khurshid Alam’s extensive experience in the financial sector could help the institution navigate the current challenges.
### Deposit Withdrawals Under Watch
Banking analysts noted that while the withdrawal of Tk 4,000–5,000 crore is significant, it does not immediately threaten the stability of a bank with a large deposit base. They warned, however, that continued withdrawals over an extended period could intensify the situation and undermine customer confidence.
Analysts said that if deposit withdrawals continue and exceed Tk 10,000–15,000 crore, stronger policy measures or structural changes may be required to restore public trust.
### Central Bank Monitoring Situation
Bangladesh Bank has said it is closely monitoring developments at Islami Bank and has assured customers that there is no risk of the bank becoming insolvent.
Central bank officials stated that investigations are underway to determine whether customers are withdrawing cash or simply transferring funds to other financial institutions. They emphasized that the bank remains capable of meeting customer obligations and that Bangladesh Bank stands ready to provide liquidity support if necessary.
Officials also recalled that Islami Bank experienced similar pressure in August 2024 and was able to overcome the situation with timely assistance from the central bank.
### Bank Urges Customers to Remain Calm
Meanwhile, Acting Managing Director Muhammad Altaf Hossain has urged customers not to be influenced by rumors circulating on social media and other platforms.
In a video message, he said the bank’s financial foundation remains strong and denied reports of any liquidity crisis. He added that Bangladesh Bank has assured full support to safeguard depositor interests and maintain stability within the institution.
Industry stakeholders, however, believe that restoring customer confidence will be crucial for resolving the situation over the long term, alongside any financial support measures provided by the central bank.
