Depositors have withdrawn in excess of Tk 3,500 crore from Islami Bank Bangladesh PLC within five working days. This rapid drain of funds follows the appointment of Md Khurshid Alam, a former deputy governor of Bangladesh Bank, as the institution’s chairman, which has triggered widespread anxiety among the bank’s clientele.
Senior executives within the commercial bank revealed that the pace of capital flight intensified significantly immediately after Mr Alam’s appointment was made public.
Breakdown of Recent Withdrawals
According to internal bank sources, the bulk of the capital flight occurred during the initial four working days of the month, with a substantial single-day surge following immediately after.
| Period / Date | Estimated Amount Withdrawn (Tk) |
| 1–4 June (First 4 working days) | 2,570 crore |
| 5 June (Single-day estimate) | 1,000 crore |
| Total (5 Working Days) | 3,570 crore |
Governance Shifts and Subsequent Disruption
Mr Alam was appointed chairman on 24 May, having previously lost his position as deputy governor of the central bank following the civil uprising in July 2024. Although he was scheduled to officially assume his responsibilities on 1 June, he was prevented from entering the bank’s head office.
Demonstrators operating under the banner of the “Islami Bank Sacheton Grahok Forum” staged a mass protest outside the building demanding his immediate removal. Due to the disruption, a scheduled board meeting could not take place in person, prompting the central bank to instruct that the proceedings be moved online.
Mr Alam’s appointment coincided with the resignation of the former chairman, Zubaidur Rahman, who stepped down amidst intense pressure and demonstrations from bank employees.
Executive Appeals and Central Bank Intervention
In an effort to calm the market, Altaf Hossain, the Additional Managing Director and acting Managing Director of Islami Bank, acknowledged the elevated withdrawal requests but urged the public to remain steadfast.
“I urge customers not to panic. There is no reason to withdraw money out of fear at this moment,” Mr Hossain stated. He further noted, “Any loan approval now goes through a rigorous scrutiny process. I am hopeful that Bangladesh Bank will step in to address the concerns among customers and help resolve the current situation.”
The central bank has confirmed it is monitoring the situation closely. Mohammad Shahriar Siddiqui, Assistant Spokesperson for Bangladesh Bank, stated that the regulatory body is tracking whether the withdrawn cash is being kept as physical currency or transferred to competing banking institutions. He clarified that Islami Bank is not currently facing an inability to honour withdrawal requests.
“If Islami Bank is unable to meet liquidity needs, the central bank will provide support,” Mr Siddiqui assured, recalling that Bangladesh Bank successfully provided similar liquidity lifelines during a previous operational crisis after 5 August 2024.
This sudden reversal in fortune comes after a period of stable growth. Following a comprehensive board restructuring after 5 August 2024, Islami Bank’s total deposit base had expanded by more than Tk 22,000 crore over a twelve-month period, reaching an aggregate of Tk 1.83 lakh crore in 2025. However, the loss of approximately Tk 3,500 crore in under a week has undone a significant portion of those gains.
In response to the escalating crisis, Bangladesh Bank officials summoned the acting Managing Director, Mr Hossain, to its headquarters for emergency talks with the central bank governor.
Escalating Employee and Customer Protests
Industrial action inside the financial sector is mounting. During a rally outside the Islami Bank Tower in Motijheel, Nur Nabi Manik, president of the primary protest platform, issued a 24-hour ultimatum demanding Mr Alam’s immediate resignation.
To press their demands, protesters announced a nationwide, two-hour daily “pen-down” strike and sit-in programme. The demonstrators are also demanding the compulsory liquidation of the 82% equity stake in Islami Bank that was allegedly acquired via fraudulent means by the S Alam Group, suggesting the proceeds be used to offset outstanding non-performing loans.
Meanwhile, branch managers across the country have reported gridlocked queues of anxious depositors, though senior management has reportedly provided little operational guidance to staff on the ground.
Broader Economic Context
The crisis at Islami Bank unfolds against a backdrop of declining public trust in the wider Bangladeshi financial ecosystem. Central bank data underscores a broader macroeconomic trend where citizens are increasingly opting to hold physical cash outside of formal banking structures.
December 2023: Total currency held outside banks stood at Tk 275,000 crore.
March 2026: Total currency held outside banks rose to Tk 303,000 crore.
This represents an increase of nearly Tk 28,000 crore in circulating physical cash outside the banking grid over the measured timeframe, underscoring the systemic pressure currently facing the nation’s financial institutions.