In consideration of depositors' interests, banking stability, and public interest, Bangladesh Bank has dissolved the board of directors of Islami Bank.
The appointments of all directors, including the recently appointed Chairman Khurshid Alam, have been canceled.
All powers and responsibilities of the board have been vested in Mohammad Zaher Hossain, an Executive Director of the central bank.
The information was disclosed in a notification issued by Bangladesh Bank on Sunday (June 14).
The notice stated that by virtue of the powers vested in Bangladesh Bank under Sections 45 and 47(3) of the Bank Company Act, 1991, and in the interest of the banking company, its depositors, and the general public, the central bank has canceled the appointments of all directors, including the chairman of the board of Islami Bank Bangladesh PLC.
The notification further noted that under Section 47(3) of the Bank Company Act, 1991, Bangladesh Bank Executive Director Mohammad Zaher Hossain will exercise all powers and perform all duties of the board.
Earlier in the day at 4:00 PM, the central bank held a meeting with the Managing Director (MD) and other top executives of Islami Bank at the Bangladesh Bank headquarters.
Central Bank Governor Mostakur Rahman was present at the meeting. Islami Bank's Managing Director (Current Charge) Altaf Hossain, two Additional Managing Directors (AMDs), and six Deputy Managing Directors (DMDs) participated in the discussion.
The Islami Bank delegation briefed the Governor on the bank's current situation, liquidity pressures, and recent developments.
Meanwhile, due to widespread unrest and a lack of confidence stemming from the appointment of the chairman, the country's largest private commercial bank has plunged into a severe crisis following massive cash withdrawals by clients.
To mitigate the situation, Bangladesh Bank has already announced an assistance package of Taka 2,500 crore for Islami Bank.
On May 24, Islami Bank Chairman Professor M. Zubaydur Rahman resigned abruptly. On the same day, former Bangladesh Bank Deputy Governor Md. Khurshid Alam was appointed as the new chairman.
Following this appointment, resentment and backlash grew among a section of the bank’s officers, employees, shareholders, and clients.
Under the banner of the "Islami Bank Conscious Depositors Forum," continuous demonstrations have been ongoing in front of the bank's head office in Motijheel for over a week.
Protesters allege that placing a controversial individual in the top position could disrupt the bank's ongoing reform efforts. They have announced a program to besiege Bangladesh Bank this coming Tuesday if their demands are not met.
