Bangladesh Bank extends Tk 25b special loan to Islami Bank amid liquidity crunch

Bangladesh Bank has provided a special loan of Tk 25 billion (Tk 2,500 crore) to Islami Bank Bangladesh PLC to help the lender overcome its liquidity crisis.

The funds were disbursed by the central bank on Sunday as an emergency measure following recent instability at the bank and mounting pressure from deposit withdrawals.

Islami Bank has been facing unrest since the appointment of a new chairman after Eid. Protesters, operating under the banner of the "Conscious Customers Forum", have been staging continuous demonstrations opposing the appointment, sparking concerns among general depositors.

The uncertainty prompted a large number of customers to withdraw their deposits, putting severe pressure on the bank's liquidity position.

The situation deteriorated to the point where the bank struggled to meet customers' withdrawal demands and failed to meet its Cash Reserve Ratio (CRR) requirement with the central bank.

To address the crisis, Islami Bank recently sought Tk 100 billion (Tk 10,000 crore) in special liquidity support from Bangladesh Bank. In response, the central bank decided to provide an initial Tk 25 billion as emergency assistance.

Earlier, Bangladesh Bank Governor Md Mostaqur Rahman indicated that the central bank was prepared to provide all necessary support.