Fresh tension erupts at Islami Bank over leadership and control

A fresh wave of tension has gripped Islami Bank as disputes
over ownership control and leadership escalated into street protests in Dhaka's
Motijheel area, raising fresh concerns over depositor confidence in the
country's largest private lender.
Hundreds of demonstrators under the
banner of the "Islami Bank Sacheton Grahok Forum" gathered outside
the bank's head office yesterday, demanding the removal of newly appointed
chairman Md Khurshid Alam.
During the protest, police used
water cannons, sound grenades, tear gas, and baton charges to disperse
demonstrators. Chases and counter-chases were also reported in the area.
Jamaat-e-Islami Secretary General Mia Golam Porwar strongly condemned the
police action, while a separate statement issued under the banner of the
Jatiyotabadi Bankers Association, Bangladesh (JBAB) also denounced attempts to
"seize control" of Islami Bank.
Protesters alleged that Khurshid,
who was scheduled to join the bank yesterday, is linked to the controversial S
Alam Group and claimed his appointment could expose the lender to renewed
financial irregularities.
They also demanded the
reinstatement of former managing director Omar Faruk Khan, who was sent on
forced leave by the board on 12 April. Although he did not submit a
resignation, he has been unable to return amid opposition from another group of
stakeholders.
The demonstrators warned of an
indefinite movement if their demands were not met. They also claimed that at
least 25 customers were injured during the clashes, five of whom were taken to
Dhaka Medical College Hospital.
Hussein Muhammad Farabi, assistant
commissioner of police of the Dhaka Metropolitan Police's Motijheel Zone, told
TBS that several hundred customers had gathered in front of Islami Bank Tower
since dawn, demanding that the newly appointed chairman be barred from joining.
"They were asked to leave, but
they did not comply. Around 9:15am, we used water cannons, sound grenades and
tear gas shells to disperse them," he said.
Struggle of bank leadership
Earlier on 24 May, M Zubaidur
Rahman stepped down as chairman of Islami Bank, reportedly under pressure from
Jamaat-e-Islami. Zubaidur, who was appointed by Bangladesh Bank on 23 July last
year during the tenure of former governor Ahsan H Mansur, submitted his
resignation to newly appointed governor Md Mostaqur Rahman in the afternoon of
24 July.
The central bank moved quickly to
appoint Khurshid Alam as the new chairman the same day, even after office
hours, on the last working day before the Eid vacation.
Khurshid, who previously served as
deputy governor during the ousted Sheikh Hasina government, was forced to leave
the central bank following protests by over a hundred officials of Bangladesh
Bank a day after the political changeover on 5 August 2024.
Jamaat expresses full support for protesters
Jamaat Secretary General Mia Golam
Porwar in a statement, said, "We strongly condemn and protest the police
firing on ordinary customers protesting in front of the head office of Islami
Bank to protect the interests of the bank and demand the resignation of the
newly appointed controversial chairman."
He added, "We also express our
full support for the customers' justified demands." Porwar further alleged
that the newly appointed chairman was an associate of "Awami
fascism", warning that his continuation in the post could expose the bank
to renewed irregularities.
"Customers believe that if he
remains in this important position, the bank may once again face extensive
looting, and the deposits of ordinary people will become insecure," he
said.
JBAB condemns alleged bid to seize control
A statement issued under the banner
of the Jatiyotabadi Bankers Association, Bangladesh (JBAB) has condemned
alleged attempts to seize control of the bank and create instability in the
sector through coordinated activity involving bots and individuals posing as
customers.
The statement said all bankers must
remain vocal against what it called a "malicious attempt" to take
over Islami Bank under the guise of a customer forum. It also urged the
government to take strict action against those allegedly involved in
destabilising the banking sector and conspiring to gain control of the lender.
It further condemned attacks,
intimidation and physical assaults allegedly linked to the unrest, and demanded
the arrest of those responsible.
Islami Bank's troubled journey
Islami Bank has long been linked to
individuals and trusts associated with Jamaat since its inception in 1983.
However, in 2017, control of the bank was effectively taken over by the S Alam
Group, owned by Mohammed Saiful Alam, also known as S Alam, who was considered
close to the then government led by Sheikh Hasina.
Following the political changeover,
Bangladesh Bank stepped in and assumed control of the institution by seizing
82% of shares held by the S Alam Group, subsequently reconstituting the board
with independent directors. However, the ownership dispute remains unresolved,
as the legality of the seized shares is still pending before the courts.
Earlier, under the leadership of
former governor Ahsan H Mansur, Bangladesh Bank planned to divest the S
Alam-held shares and bring in new strategic investors. The process, however,
has since stalled after the appointment of new governor Md Mostaqur
Rahman.
Once the country's most profitable
lender just two years ago, Islami Bank reported a loss of Tk288 crore in the
January-March quarter of 2026. Its classified loans surged to 42.36% at the end
of 2024, up from 4.32% in 2023, according to its annual report. The bank also
faced a provision shortfall exceeding Tk 65,000 crore by the end of 2024.
The lender has failed to declare
dividends for two consecutive years, resulting in its first-ever downgrade to
the 'Z' category in 2024.
BB instructs Islami bank to hold board meeting online
A board meeting, scheduled for
yesterday afternoon could not take place after newly appointed Chairman
Khurshid Alam failed to attend his first working day amid protests.
In the prevailing situation, the
central bank instructed that the board meeting be held online. The session
eventually continued until 9pm.
Arif Hossain Khan, executive
director and spokesperson for the Bangladesh Bank, said the central bank
approved a virtual board meeting amid concerns over potential unrest driven by
information circulating on social media.
He added that while law enforcement
agencies handle external security, Bangladesh Bank is monitoring internal
security closely.
He further said it is inappropriate
to associate any bank with a specific political party.
According to him, attempts to build
or project a political identity for a bank could pose a serious threat to its
long-term stability and sustainability.
In light of recent protests and
developments, the central bank is also reviewing whether any banks are becoming
linked to particular political organisations, added Arif Hossain.
Protesters enter meeting room
During their protest, members of
the Islami Bank Sacheton Grahok Forum entered the room during a meeting between
law enforcement personnel and Islami Bank's acting Managing Director Altaf
Hossain.
The meeting was reportedly taking
place at the bank's head office when forum members entered the room, alleging
that pressure was being exerted to compel the acting MD to hold a virtual board
meeting under influence of law enforcement officials.
They also claimed that police in
uniform and several plainclothes personnel were present in the room prior to
their arrival, though those officers later left before journalists and forum
members entered.
Around 3:30pm, members of the forum
gathered outside Altaf Hossain's office and alleged that the meeting was being
conducted under pressure from law enforcement agencies.
A senior Islami Bank official told
TBS that pressure had been applied to hold a board meeting, and an IT team was
reportedly sent to the chairman's residence to facilitate a virtual board session.
















