Islami Bank must not be a battleground
The ongoing turmoil at the Islami Bank Bangladesh PLC (IBBL) is both regrettable and deeply concerning. The recent acknowledgement by the bank’s acting managing director that the country’s largest Shariah-based bank is facing significant withdrawal pressure should be treated with the utmost seriousness. It calls for decisive measures to counter rumour-mongering and prevent the bank from becoming a tool for political score-settling.
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Reports indicate that IBBL lost Tk 4,240 crore in deposits within seven days following protests against the central bank’s appointment of Md Khurshid Alam as IBBL chairman. According to some reports, the demonstrations, organised under the banner of Conscious Customers’ Forum, have received support from Jamaat-e-Islami. In a statement issued on June 1, Jamaat Secretary-General Mia Golam Porwar expressed solidarity with the protesters and demanded the cancellation of the appointment. On June 3, Jamaat Ameer Dr Shafiqur Rahman also stated that opposition leaders and activists were prepared to mobilise to “rescue” the bank. These highly charged statements from the party are both notable and intriguing.
Meanwhile, a section of the bank’s employees reportedly joined the protests by observing brief work stoppages. Such actions are highly unusual as employees have no role under the existing laws in the appointment of a company’s board members or senior management.
Indeed, questions can be raised about the adequacy of the central bank’s due diligence in selecting the chairman, whose spouse has a record of loan default. However, portraying the appointment of a former deputy governor from the Awami League era as a politically motivated move by the BNP government appears to be a considerable stretch. Nevertheless, the confusion surrounding the issue is partly of BNP’s own making. The party introduced an unpopular amendment to the Bank Resolution Ordinance, originally enacted by the interim government. Critics feared that the amendment could allow former directors—including controversial businessman S Alam and his associates, who stand accused of plundering depositors’ funds—to regain influence over the bank. BNP’s subsequent promise to amend the law again and close the perceived loophole has done little to dispel those concerns.
For decades, politics—and particularly partisan allegiance—has played an outsized role in Bangladesh’s banking sector, often taking precedence over sound commercial considerations. The arbitrary granting of banking licences, politically driven takeovers, and reckless lending decisions have inflicted lasting damage on the economy. As a result, many banks continue to struggle with severe financial and governance crises. According to government estimates, approximately $234 billion was syphoned out of the country during the tenure of the previous Awami League government.
It is therefore imperative for both the government and all political parties to delink partisan politics from the banking sector and allow commercial banks to operate on financial prudence, transparency, and strict compliance with laws and regulations. While the government must provide greater clarity regarding its banking reform agenda, opposition parties should refrain from supporting any actions or groups that disrupt the normal operations of financial institutions. Restoring public confidence in the banking system is a delicate task, and there can be no room for further missteps, as have been seen already.
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