BB provides Tk 2,500cr liquidity support for Islami Bank

Bangladesh Bank (BB) has provided an emergency liquidity support of Tk 2,500 crore for Islami Bank Bangladesh PLC to help the Shariah-based lender mitigate its severe cash crunch and resume suspended clearing operations.

The central bank approved the liquidity support on Sunday, allocating the special fund directly into Islami Bank’s current account maintained with the BB, according to sources in both institutions.

Following the financial injection, the bank's halted cheque clearing system has resumed.

According to a top executive at Islami Bank, the bank has been facing an exceptional spike in cash demand. "Deposits are almost non-existent at the moment, while everyone is rushing to withdraw their funds," the official said on condition of anonymity.

The liquidity strain escalated further following recent leadership shifts and administrative disputes.

Before Eid-ul-Azha holidays on May 24, bank's then-chairman M Zubaidur Rahman resigned. Later that evening, former Bangladesh Bank Deputy Governor Md Khurshid Alam was appointed as an independent director and new chairman of the bank.

Currently, five independent directors on Islami Bank's board, including the chairman, are central bank appointees.

Following these changes, protests broke out under the banner of the "Islami Bank Sachetan Grahak Forum", pressing a seven-point demand that includes the removal of the new chairman.

The unfolding situation at Islami Bank also triggered heated debates between treasury and opposition benches in Parliament.

Amid growing public discourse, panic withdrawals intensified among clients, prompting Islami Bank to formally seek Tk 10,000 crore in emergency financial assistance from the central bank.

Sunday's Tk 2,500 crore fund injection marks the first major deployment to stabilise the institution.