Bangladesh central bank appoints observer to troubled Islami Bank

Bangladesh Bank Executive Director Md Ashraful Alam is tasked with the role

The central bank has appointed an observer to Islami Bank Bangladesh amid street protests and heated exchanges in parliament over the troubled lender's top management.

The decision was taken on Wednesday, hours after Bangladesh Bank Governor Md Mostaqur Rahman met with the managing directors of different banks at the central bank headquarters.

Shahriar Siddiqui, assistant spokesperson of the central bank, said its Executive Director Md Ashraful Alam was tasked with the role in line with the Bank Companies Act, 1991.

After the bankers’ meeting in the afternoon, Mashrur Arefin, chairman of the Association of Bankers Bangladesh, called for a swift resolution to the turmoil surrounding Islami Bank, warning that the dispute over its top management is beginning to cast a shadow over the wider banking sector.

Quoting Governor Mostaqur, he said: “The issue has now taken on a political dimension.”

The crisis deepened after the central bank appointed Khurshid Alam to chair the Shariah-based bank on May 24.

It was followed by hours-long street protests where demonstrators clashed with police outside the bank's headquarters in Motijheel.

It also led to heated exchanges in parliament.

On Tuesday, the lender sought Tk 100 billion in liquidity support from the central bank, citing growing “pressure of the withdrawal of money”.