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Bangladesh Bank has provided an additional BDT 2,500 crore in liquidity support to Islami Bank Bangladesh PLC.
This information was revealed on Monday (June 15) by sources at Islami Bank. Earlier on Sunday, it was reported that the central bank decided to provide the bank with the same amount of financial assistance. This initial sum was granted in response to a total request for BDT 10,000 crore in assistance.
This liquidity support has been primarily provided to manage the significant pressure from customer cash withdrawals over several consecutive days since June 1. Earlier, the Governor had indicated that cash assistance would be provided to the bank if necessary, and there was a possibility of further assistance in the future, considering the situation.
According to Bangladesh Bank data, depositors withdrew approximately BDT 6,000 crore from Islami Bank in just nine days, from June 1 to June 9. Additionally, the bank’s investments in various sectors created pressure on its cash liquidity management.
According to internal accounts, deposits decreased by BDT 4,204 crore between June 1 and June 7, followed by further withdrawals of approximately BDT 2,000 crore in the subsequent two days. This led to cash shortages in some branches and ATM booths.
To control the situation, Governor Mostakur Rahman held a meeting with top officials of Islami Bank at Bangladesh Bank’s head office. Officials from various levels of the bank’s management were present at the meeting.
Subsequently, exercising powers under Sections 45 and 47(3) of the Bank Company Act, 1991, the central bank reorganized Islami Bank’s board of directors, canceling the appointments of all directors, including the chairman. Concurrently, the overall management responsibility of the bank was entrusted to Bangladesh Bank’s Executive Director Zahir Hossain, who will henceforth exercise the powers and responsibilities of the board.