The central bank of Bangladesh, Bangladesh Bank, has officially removed the chairman and all serving directors of Islami Bank Bangladesh PLC from their respective positions. This decisive administrative action was formally announced on Sunday night, 14 June, serves as a direct regulatory intervention aimed at addressing, managing, and mitigating the ongoing financial and administrative crisis within the private financial institution.
According to the official statement released by Bangladesh Bank, the termination of the appointments of the entire board of directors, including the newly appointed chairman, was executed under specific statutory powers vested in the central bank. These regulatory powers are explicitly derived from Section 45 and Section 47(3) of the Bank Company Act, 1991. The primary regulatory authority emphasized that this measures-driven action was taken in the absolute interest of the banking company, the financial security and safety of its millions of depositors, and the overarching public interest of the nation’s financial sector.
Regulatory Transition and Governance Structure
Following the total dissolution of the existing board of directors, Bangladesh Bank confirmed that its Executive Director, Mohammad Johir Hossain, will assume full responsibility for the governance and operations of the institution. Under the specific provisions laid out in Section 47(3) of the Bank Company Act, 1991, Mohammad Johir Hossain has been legally authorised to exercise all the administrative powers and perform all the operational duties that were previously held by the dissolved board of directors.
Prior to this sweeping regulatory removal, the senior leadership structure of Islami Bank consisted of five key directors. Notably, all five of these individuals were independent directors who had been appointed directly by the central bank itself in an effort to stabilize the institution. The corporate management of the bank had been facing a series of rapid administrative changes, high-profile exits, and severe internal instability over the preceding weeks.
24 May: This date marked the final official working day before the commencement of the Eid-ul-Adha holidays, during which the former chairman of Islami Bank, M Zubaydur Rahman, formally tendered his resignation from his post.
24 May (Night): In a swift response on the night of the very same day, Bangladesh Bank appointed its former Deputy Governor, Md. Khurshid Alam, to serve as an independent director and assume the role of the new chairman of Islami Bank.
Post-24 May: Shortly after these top-tier structural changes were implemented, the Managing Director of Islami Bank, Omar Faruk Khan, also resigned from his executive post, further compounding the leadership vacuum.
Public Unrest, Clashes, and Political Repercussions
The appointment of the former Deputy Governor as the new chairman immediately sparked intense dissatisfaction, professional resistance, and sustained protests outside the corporate offices of the bank. An organisation named the ‘Sadhon Grahaq Forum’ (translated as the Conscious Customers Forum) initiated public demonstrations immediately following the announcement of the appointment. This group formulated and presented a total of seven specific demands, topmost of which was the immediate removal of the newly appointed chairman. The civil unrest and corporate instability escalated significantly on 1 June, when the field protesters engaged in violent physical clashes with the deployed police force.
The escalating operational and leadership crisis within Islami Bank also rapidly became a subject of heated debate within the National Parliament of Bangladesh. Responding directly to statements made by the Home Minister during an active parliamentary session, the Leader of the Opposition, Shafiqur Rahman, expressed profound concern regarding the financial stability of this specific institution and its wider, systemic impact on the broader national economy.
“If Islami Bank suffers further damage, I personally believe that the economy of Bangladesh will sink to the ground,” Shafiqur Rahman stated directly on the parliament floor. “Confidence is a pyramid. If this pyramid tilts or collapses, it will create a lack of trust among the people in the entire banking system, and this mistrust will not bring any positive message for Bangladesh. Those who send remittances to Bangladesh are also experiencing anxiety and instability right now.”
It was against the backdrop of this severe public discontent, physical street clashes, and intense political pressure surrounding the bank’s leadership that the central bank ultimate took the final regulatory step to dissolve the board completely on Sunday night.