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Executive heads of country's commercial banks have expressed serious concern over the ongoing crisis surrounding Islami Bank Bangladesh PLC as it has started affecting the entire industry negatively.
Calling for an immediate resolution, they have said the prevailing tensions in the country's largest Shariah-based bank should be resolved through mutual understanding among the parties concerned.
Managing directors (MDs) and chief executive officers (CEOs) of the banks shared the concerns with Bangladesh Bank (BB) Governor Md Mostaqur Rahman in a quarterly bankers' meeting at the central bank headquarters in the capital on Wednesday.
Emerging from the meeting, Chairman of the Association of Bankers Bangladesh (ABB) Mashrur Arefin said they want a stable banking sector and the central bank governor also has the same view.
"What is currently happening at Islami Bank has begun to negatively affect the entire banking industry. We want both sides to reach a settlement as quickly as possible," he said.
Arefin, also the MD and CEO of City Bank, said the governor explained the current situation to bankers and expressed optimism about finding a prompt solution.
Responding to a question about the bank's recent crisis, he said the governor had informed them that the issue had taken on a political dimension.
Refraining from making any further comments, the chairman of the ABB, the apex body of the country's top bank executives, said, "We are hopeful that a solution will be found. The governor appeared very determined today, and that gives us confidence that a solution to the problem could be found shortly."
One of the key topics discussed at the meeting was the stimulus package involving Tk 600 billion to revive economic activities after months of sluggishness.
The ABB chairman said the sluggish credit growth was currently one of the banking sector's biggest challenges.
"Credit growth is now one of our primary concerns. The governor also wants to see a jump in credit appetite from the private sector. That is why this package is being introduced."
According to him, the central bank will provide part of the financing, while the remaining funds will come from commercial banks.
However, since a large portion of banks' surplus liquidity is currently invested in treasury bills and bonds, bankers have suggested alternative mechanisms for mobilising funds.
"We informed the governor about possible ways to collect funds from banks because much of our available money is already invested in treasury bills and bonds," Arefin said.
The expansion of digital payment systems was also discussed in detail.
Arefin announced that all banks in the country would jointly launch a nationwide promotional campaign for Bangla QR in July.
He said the ABB and its member banks would promote Bangla QR through billboards, social media, and other communication channels.
At the same time, thousands of QR codes would be installed across the country, he also said.
The banker added that the meeting also reviewed the expansion of TakaPay, Bangladesh's domestic card payment network.
Meanwhile, the banking regulator has appointed Ashraful Alam, a central bank executive director, as an observer to the board of directors of Islami Bank.
The appointment came a few hours after protestors under the banner of Islami Bank Conscious Depositors Forum submitted a memorandum to the finance minister, demanding the immediate removal of the bank's current board Chairman, Md Khurshid Alam.
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