B Mirror Report: Bangladesh Bank on Sunday held an emergency meeting with the top executives of Islami Bank Bangladesh PLC as the country’s largest private commercial bank faces a severe liquidity crunch triggered by a loss of depositor confidence and massive withdrawals.

The meeting began at 4:00 pm at the central bank’s headquarters in Dhaka and was attended by Bangladesh Bank Governor Md. Mostafizur Rahman.

According to Bangladesh Bank, Islami Bank’s acting Managing Director, two Additional Managing Directors (AMDs), and six Deputy Managing Directors (DMDs) participated in the meeting. The bank’s delegation briefed the governor on the lender’s current situation, liquidity pressures, and recent developments.

The crisis emerged following the appointment of former Bangladesh Bank Deputy Governor Md. Khurshid Alam as chairman of Islami Bank after the sudden resignation of Chairman Professor M. Zubaidur Rahman on May 24.

Banking sources said the appointment sparked dissatisfaction among a section of the bank’s officials, shareholders, and customers, leading to widespread withdrawals by depositors. Within just seven working days, customers reportedly withdrew around Tk 4,240 crore, putting immense pressure on the bank’s liquidity management.

To ease the situation, Bangladesh Bank has already provided Tk 2,500 crore in support to Islami Bank. Of this amount, Tk 2,000 crore was provided in cash, while an additional Tk 500 crore was injected to ensure uninterrupted operations of the Real Time Gross Settlement (RTGS) system.

Officials said Islami Bank’s Cash Reserve Ratio (CRR), which had previously remained above the regulatory requirement, has declined sharply due to continuous deposit withdrawals. Although the bank was required to maintain around Tk 7,000 crore in reserves, the amount has reportedly fallen to approximately Tk 2,600 crore. The balance in its current account with the central bank has also come under pressure.

Faced with mounting difficulties in meeting daily transactions and customer demands, Islami Bank has reportedly sought a special liquidity support package of Tk 10,000 crore from Bangladesh Bank, with the initial Tk 2,500 crore assistance forming part of that request.

Meanwhile, protests under the banner of the Islami Bank Conscious Customers’ Forum have continued for more than a week outside the bank’s head office in Motijheel. Protesters allege that appointing a controversial figure as chairman could hinder the bank’s ongoing reform process and have threatened to besiege Bangladesh Bank on Tuesday if their demands are not met.

Addressing a post-budget press conference on Friday, Governor Mostafizur Rahman denied allegations of any unlawful government or central bank intervention in Islami Bank’s affairs. He said Bangladesh Bank had only replaced one board member on March 16 over allegations of irregularities and had issued no instructions regarding appointments, transfers, or promotions within the bank. He also dismissed social media rumours surrounding the issue as baseless.