Bankers' association expresses concern over Islami Bank crisis
The situation is not merely an issue of a single institution but is hurting the entire banking sector, and bankers are 'highly concerned', says ABB Chairman Mashrur Arefin after a meeting with the Bangladesh Bank governor.
The Association of Bankers, Bangladesh (ABB), an organisation of bank chief executives, has expressed deep concern over the ongoing instability surrounding Islami Bank.
ABB Chairman and Managing Director of City Bank, Mashrur Arefin, shared these concerns today (10 June) following a high-level meeting with the governor of Bangladesh Bank.
He said the situation at Islami Bank is not merely an issue of a single institution but is having a negative impact on the entire banking sector, adding that bankers are "highly concerned" over the developments.
Keep updated, follow The Business Standard's Google news channel
Mashrur Arefin said the governor views the ongoing situation at Islami Bank Bangladesh PLC not only as a banking sector issue but also as a political matter, and is attempting to resolve it through consensus among the concerned parties.
The ABB chairman further said the governor has taken a strict stance on ensuring good governance in the banking sector, urging chief executives not to yield to political pressure. He also instructed banks to ensure accurate reporting in the Credit Information Bureau (CIB).
The meeting also discussed measures to boost credit flow in the banking sector. According to him, the government and the central bank are planning a new Tk60,000 crore package to increase credit growth, with a focus on small, medium and micro enterprises (SMEs). The funds will be disbursed under the central bank's refinancing schemes.
Masrur Arefin added that the governor highlighted inaccuracies and delays in data submitted for export and import transactions, which are creating complications in national accounting.
He noted discrepancies in import pricing and said that amid current market instability, banks have been advised to verify prices through global platforms or the internet before opening letters of credit (LCs), in order to avoid overpricing and potential losses to the country.
Earlier, Professor Dr M Zubaidur Rahman resigned as chairman on 24 May. Former deputy governor Md Khurshid Alam was later appointed chairman. He had resigned from the deputy governor post following the fall of the Sheikh Hasina government on 5 August amid protests.
Since his appointment, a section of customers and shareholders has expressed dissatisfaction. Amid the ongoing protests, the resignation of managing director Md Omar Faruk was accepted during a virtual board meeting on 1 June.
