The Bangladesh Bank has stated that no form of political influence or political activity will be permitted in relation to one of the country’s largest private-sector financial institutions, Islami Bank Bangladesh PLC. The central bank reaffirmed its position on Monday (22 June), as confirmed by its spokesperson, Arif Hossain Khan.
He emphasised that instability within such a major banking institution could extend far beyond a single entity, potentially undermining confidence across the wider financial sector. Safeguarding stability, ensuring proper governance, and maintaining the bank’s long-term operational continuity have therefore been identified as top priorities.
The central bank further indicated that efforts are underway to establish a credible, competent, and transparent board of directors for the institution. At the same time, it stressed that protecting the interests of depositors remains paramount, particularly given the systemic importance of the bank within the national banking framework.
Public demonstrations and demands
On the same day, members of the Islami Bank Conscious Customers Forum staged a demonstration in front of the Bangladesh Bank headquarters. Protesters called for the immediate reconstitution of the bank’s board of directors, including the removal of the current chairman and the entire existing board.
They alleged that the influence of a specific group within the organisation had long undermined governance standards and operational transparency. According to the protesters, continued influence of this nature could further compromise financial integrity and disrupt normal banking activities.
The demonstrators explicitly demanded that no individuals associated with the S Alam Group should be included in the board. They also called for the reinstatement of governance structures similar to those in place prior to 2017.
An ultimatum was issued during the protest, giving the authorities 24 hours to form a new board. Failure to comply, they warned, would lead to more stringent protest actions.
Background developments
Earlier, on 16 June, the same group submitted a memorandum to the Governor of the Bangladesh Bank, urging a restructuring of the board and changes to the bank’s shareholding framework. The memorandum also called for a return to the institution’s previous ownership structure.
The protest movement began on 1 June, initially focusing on demands for the resignation of the then-chairman. Over time, the movement expanded, reflecting growing dissatisfaction among stakeholders. Following escalating tensions and internal instability, the central bank dissolved the entire board on 13 June. An executive director of the Bangladesh Bank was subsequently appointed to oversee interim administrative responsibilities.
Timeline of key events
| Date | Event |
|---|---|
| 1 June | Protest begins demanding chairman’s resignation |
| 13 June | Central bank dissolves board of directors |
| 16 June | Memorandum submitted calling for restructuring |
| 22 June | Central bank reaffirms stance and outlines priorities |
Central bank position
The Bangladesh Bank reiterated that instability in a large financial institution could have far-reaching consequences for the national economy. It warned that any erosion of depositor confidence could trigger broader systemic risks within the banking sector.
Accordingly, the central bank is prioritising the restoration of stability through the rapid formation of a credible governance structure. It also underscored the importance of maintaining uninterrupted banking operations, strengthening governance mechanisms, and ensuring depositor protection.
Overall, the situation at Islami Bank Bangladesh PLC remains under close supervision by Bangladesh Bank, as authorities seek to stabilise operations and restore confidence in one of the country’s most significant financial institutions.