Bangladesh Bank extends Tk 6,500cr liquidity support to Islami Bank in three days

Bangladesh Bank (BB) has provided an additional Tk 1,500 crore in liquidity support to Islami Bank Bangladesh PLC, bringing the total emergency lending to Tk 6,500 crore in just three days as the country’s largest Shariah-based lender struggles with mounting cash pressure.

Officials said the latest support was extended on Wednesday (June 17) to help ease liquidity constraints and ensure uninterrupted customer transactions.

Sources linked the liquidity strain to rising non-performing loans, past irregular lending practices and declining depositor confidence, all of which have contributed to pressure on cash flow and routine banking operations.

The situation has at times led to difficulties in meeting customer withdrawal demands.

On Tuesday, a delegation of the Islami Bank Sacheton Grahok Forum met the Bangladesh Bank governor, raising a set of seven demands regarding the bank’s governance and ownership structure.

Among their key proposals was the return of shares allegedly acquired through influence to former owners or their listing through an IPO to ensure transparency and accountability.

The forum also raised the issue of reinstating former Managing Director Omar Faruk Khan, stating that the matter would be decided by the bank’s reconstituted board in line with regulatory guidelines, according to their briefing after the meeting.

The group further called for restrictions on political activities within the bank and urged the formation of a neutral, experienced and politically independent board.

Bangladesh Bank, according to the forum, expressed a positive stance toward improving governance standards.

Islami Bank, one of the country’s largest private sector lenders, has been under scrutiny since a major ownership and management shift in 2017. Allegations of concentrated influence by a business group, large-scale lending irregularities and rising default loans have since dominated discussions around the institution’s financial health.

Following last year’s political transition, the central bank restructured the bank’s board and initiated measures aimed at stabilising operations. However, lingering structural weaknesses and legacy loan issues continue to weigh on liquidity.

With depositor confidence and financial stability at stake, ensuring proper governance and restoring trust in the banking system remains a key challenge for the regulator.