Islami Bank will soon get neutral board: Interim chief

Officials are working to swiftly form a five-member efficient and neutral board of directors at the Islami Bank, said Mohammad Zahir Hussain, the newly appointed interim administrator at the bank.

The aim is to regain confidence among depositors and strengthen confidence, and there is no scope to look back following the recent debacle, said Zahir Hussain, also executive director at Bangladesh Bank, at a press conference held at Islami Bank head office on Monday.

He urged depositors and clients to continue their transactions with Islami Bank without having any reservations, and to have full faith in the bank.

A thorough review and vetting process is continuing to appoint five directors to the bank swiftly, he noted.

He said that he is serving as the interim chief and has formed a one-member board only on a temporary basis to ensure that banking operations can continue without any interruption.

At the presser, Islami Bank’s Acting Managing Director Altaf Hossain said that depositor confidence said that account closures had declined 75% at a major branch following the recent bank run.

Total withdrawals and deposits had also reached the same level over the past two days, he added, signaling returning depositor confidence.

On Sunday, the Bangladesh Bank issued a notification dissolving the entire board of Islami Bank, and appointing Zahir Hussain as the interim chief.

The move came amid growing tensions surrounding the bank over the appointment of a controversial figure as the chairman.

A section of Islami Bank depositors launched a protest in late-May against the Bangladesh Bank’s appointment of its Deputy Governor Md Khurshid Alam as the new chairman of Islami Bank.

Khurshid was implicated in corruption lawsuits during the interim government and also allegedly had ties to the ousted Awami League regime. Lately, loan defaults by a company co-owned by Khurshid’s wife also came to light.

The Jamaat-e-Islami also raised strong objections at the Parliament against Khurshid’s appointment.

Despite the protests, the Bangladesh Bank maintained that Khurshid would remain as the new chairman of Islami Bank. But then, the controversy sparked a bank run at Islami Bank as depositors started hastily withdrawing funds.

On Monday, the central bank dissolved the Islami Bank’s entire board.

On Monday, the Association of Bankers Bangladesh Ltd welcomed the move, saying hopefully it would pacify tensions at Islami Bank, and contribute to reviving confidence among depositors, investors and other stakeholders.

On 10 June, ABB had expressed grave concerns to Bangladesh Bank governor as the Islami Bank situation was getting “a political element,” it said in a statement.

On 10 June, the organisation had also called on the governor to resolve the issues raised in consultation with all the stakeholders, it added.