Islami Bank Faces Reserve Pressure Amid Withdrawals

The logo of Islami Bank PLC. Photo: Collected

Islami Bank Bangladesh PLC has come under reserve pressure after customers reportedly withdrew around Tk4,240 crore over the past week following the appointment of a new chairman, according to a senior bank official.

The official said the bank’s cash reserve ratio (CRR) has fallen below the regulatory requirement, moving into negative territory due to heavy withdrawal pressure.

Customers across the country reportedly began withdrawing deposits after the appointment of Khurshid Alam as chairman, triggering a sharp outflow of funds in recent days.

The official said the bank had previously maintained reserves above the required level. However, the sudden rise in withdrawals significantly reduced its reserve position.

“We had a reserve requirement of around Tk7,000 crore and were maintaining more than that. Due to the recent situation, it has fallen to nearly Tk2,600 crore. However, our current account with Bangladesh Bank remains positive,” the official said.

The bank has also sought Tk10,000 crore in liquidity support from the central bank to help address the reserve shortfall, according to the official.

The cash reserve ratio (CRR) refers to the portion of deposits banks are required to hold with the central bank in cash. In Bangladesh, banks are generally required to maintain an average CRR of 4 percent.

On 24 May, former chairman Zobaidur Rahman stepped down from his position. On the same day, the central bank appointed Khurshid Alam, a former deputy governor of the central bank, as the new chairman of the bank.

Alam had previously resigned from his deputy governor post following the political transition in August last year.