Bangladesh Bank appoints observer to Islamic Bank
Amid intense pressure to withdraw deposits and ongoing instability, the central bank has appointed a new observer to the country’s largest and Shariah-based private bank ‘Islami Bank Bangladesh’. In accordance with the provisions of the Bank Companies Act of 1991, Bangladesh Bank’s one of the executive directors Md. Ashraful Alam was appointed to this important post on Wednesday (June 10). Central bank director and assistant spokesperson Mohammad Shahriar Siddiqui confirmed the matter. Earlier, Bangladesh Bank had once appointed an observer to Islami Bank in December 2022.
Assistant spokesperson Shahriar Siddiqui said that this special appointment has been made to closely monitor the overall activities of the bank, protect the interests of the institution, ensure deposit protection of general depositors and ensure the larger public interest. He also said that the new observer Md. Ashraful Alam will now directly participate in all meetings of the board of directors of Islami Bank and other relevant policy-making activities. At the same time, he will regularly provide the central bank with necessary information and observations about the bank’s internal operations. Bangladesh Bank hopes that this decision will further strengthen the confidence of customers in the bank’s operations and financial discipline.
It is worth noting that on May 24, the day before the holy Eid-ul-Azha holiday, former Deputy Governor of Bangladesh Bank Md. Khurshid Alam was appointed as the new chairman of Islami Bank. However, since this appointment, i.e. from June 1, a kind of unrest and panic has arisen among customers in the bank, which has not yet been completely alleviated.
According to the information received, about Tk 4,000 crore of deposits were withdrawn from the bank in just one week between June 1 and 7. To cope with the sudden pressure of this unprecedented deposit withdrawal and to overcome the liquidity crisis, Islami Bank has applied to Bangladesh Bank on Monday (June 8) for special liquidity support of Tk 10,000 crore on an emergency basis.
