Staff Reporter:
Islami Bank Bangladesh PLC, one of the largest private commercial banks, has hit a severe liquidity cri-sis, forcing it to seek Tk 10,000 crore in emergency liquidity support from the central bank.
Amid agitation on the 7th day for resignation of Chairman Khursid Alam and mass withdrawal of cash, the bank requested the assistance after failing to maintain its required Cash Reserve Ratio (CRR) due to a significant drop in its current account balance at Bangladesh Bank.
A top official of Islami Bank confirmed the development, stating that the bank’s liquidity came under massive pressure following recent large-scale deposit withdrawals by panic-stricken clients.
“While our principal account with Bangladesh Bank remains positive, a severe CRR deficit has been cre-ated. The balance in our principal account has fallen below the regulatory limit required to maintain the CRR,” the official explained.
According to bank sources, Islami Bank’s balance in its principal account with the central bank has plummeted to approximately Tk 2,600 crore, down drastically from its previous position of around Tk 7,015 crore. To tackle the sudden shortfall, the bank officially requested a Tk 10,000 crore liquidity in-jection from Bangladesh Bank.
Insiders attribute this sudden cash crunch to growing consumer anxiety surrounding the recent leadership shakeup at the bank. Estimates suggest that customers have pulled out nearly Tk 4,000 crore from the bank within a short period.
The bank had previously suffered a devastating liquidity crisis during the tenure of the ousted Awami League government, driven by massive financial irregularities and aggressive loan disbursements linked to the controversial S. Alam Group. During that period, the bank repeatedly failed to maintain its CRR and slid into a negative balance in its current account with the central bank.
Although the bank had slowly recovered under the interim government—climbing out of its CRR deficit and stabilizing its central bank current accounts—fresh instability emerged recently.
On May 24, following advice from Bangladesh Bank, the bank’s then-chairman Professor M Zubaidur Rahman resigned. On the same night, former central bank deputy governor Khurshid Alam was appoint-ed as the new chairman. Since then, groups of shareholders and customers have been holding protests opposing his appointment, leading to a renewed wave of panic withdrawals.
