BB lends Tk2,500cr to Islami Bank as special liquidity support: Sources
The private commercial bank fell into a severe liquidity crunch following a wave of unrest that erupted after the Eid-ul-Adha holidays over the appointment of its new chairman
Bangladesh Bank has extended a special loan of Tk2,500 crore to Islami Bank Bangladesh to help the Shariah-based lender mitigate a deepening liquidity crisis.
The central bank disbursed the financial assistance today (14 June), according to sources within Islami Bank.
The private commercial bank fell into a severe liquidity crunch following a wave of unrest that erupted after the Eid-ul-Adha holidays over the appointment of its new chairman.
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Under the banner "Islami Bank Sachetan Grahok Forum", a group of clients have been staging continuous demonstrations opposing the appointment.
The prolonged agitation triggered panic among clients, prompting a massive volume of depositors to withdraw their funds from the bank.
As the cash flight intensified, the liquidity crisis deepened to a level where the bank failed to disburse cash according to its customers' demands.
Alongside failing to meet customer withdrawals, Islami Bank also failed to maintain its mandatory Cash Reserve Ratio (CRR) with the central bank.
Consequently, the private lender sought liquidity support of Tk10,000 crore from the central bank last week. Following that request, this special support of Tk2,500 crore has been provided, according to the sources.
Earlier, on Friday (14 June), during a post-budget press conference, Bangladesh Bank Governor Mostaqur Rahman hinted at providing liquidity support to Islami Bank.
He stated that the crisis at Islami Bank would be resolved quickly and depositors would face no trouble withdrawing their money.
"For Islami Bank, we will provide whatever emergency liquidity support is required," Mostaqur had said, rejecting allegations of unlawful interference in the management of the bank.
