Neutral board plan for Islami Bank

The newly appointed administrator of Islami Bank Bangladesh PLC, Mohammad Zahir Hussain, has said that efforts are underway to form a fully neutral board for the bank as part of broader initiatives to strengthen governance and restore confidence among depositors.

Speaking to reporters after joining the bank around 1pm on Monday (15 June), Hussain said, “We want to form a completely neutral board for Islami Bank,” adding, “I have been appointed administrator for a limited period.”

Urging customers to continue banking activities without concern, he said there was “no opportunity to look back” and assured that banking operations and transactions would remain uninterrupted.

Meanwhile, a group of Islami Bank customers has welcomed Bangladesh Bank’s decision to dissolve the bank’s board of directors, while urging the central bank to immediately appoint a full board comprising honest, qualified and professional individuals with no political affiliation.

Under the banner of the Islami Bank Sachetan Grahok Forum, customers on Monday (15 June) congratulated Bangladesh Bank for dissolving the board, including its chairman, and called for steps to restore confidence in the institution.

Bangladesh Bank on 14 June removed the entire board of Islami Bank Bangladesh PLC, including the chairman, under the Bank Company Act, 1991. In a statement, the central bank said the decision was taken in the interest of depositors and the public.

It also said that under Section 47(3) of the Bank Company Act, 1991, Bangladesh Bank Executive Director Mohammad Zahir Hussain had been assigned to exercise all powers and responsibilities of the board.

On the same day, Bangladesh Bank provided a special loan of Tk 2,500 crore to Islami Bank Bangladesh to help the Shariah-based lender manage a worsening liquidity crisis.

The bank had been facing severe liquidity pressure following unrest after the Eid-ul-Adha holidays over the appointment of its now-removed chairman, Md Khurshid Alam. The Islami Bank Sachetan Grahok Forum had staged demonstrations in protest against the appointment.

The customers also announced that they would submit a seven-point memorandum to the Bangladesh Bank governor on 16 June at 11:30am.
At a press conference at Islami Bank Tower in Dhaka’s Dilkusha, forum convenor Nurunnabi Chowdhury Manik said a full board of directors should be formed immediately to ensure proper governance and protect customers’ interests.

The forum also demanded the formation of a special tribunal to try those responsible for alleged bank looting, recovery of funds allegedly laundered abroad, and an end to what it described as controversial decisions regarding the bank.

Manik said customers had previously demanded the resignation of chairman Khurshid Alam, whom they alleged was associated with S Alam Group, as well as the reinstatement of former managing director Omar Faruk Khan and measures to restore trust in the institution.

“Islami Bank is not the asset of any individual or group. It is a national institution connected with the deposits, trust and future of millions of customers. Swift and effective steps must be taken to protect the bank’s stability, good governance and the interests of customers,” he said.

He added that although Bangladesh Bank had dissolved the board, authority had again been concentrated in the hands of a single individual, which, he said, was not desirable for a financial institution.

Among its seven-point demands are the immediate formation of a full board of directors, return of shares to original owners, recovery of laundered funds, prevention of rehabilitation of alleged bank “looters”, and measures to prevent panic in the Islamic banking sector.