Islami Bank plunges into fresh chaos

The appointment of a new chairman threw Islami Bank into fresh turmoil, as protests, police action, and internal disorder gripped the country’s largest Islamic lender yesterday.

Hundreds of people gathered in Motijheel under the banner of the Conscious Customers’ Forum, demanding that the central bank cancel the appointment of Md Khurshid Alam as its chairman and reinstate ex-managing director Md Omar Faruk Khan, who recently resigned.

Khurshid was among the four Bangladesh Bank top brass who were forced to resign amid protests of hundreds of central bank officials days after the fall of the Awami League-led government on August 5, 2024.

The Conscious Customers’ Forum’s rally began around 9:30am yesterday. Soon, police moved in and used sound grenades and water cannons on the protesters, which left some people injured. The demonstrations continued throughout the day.

Law enforcement agencies attacked a peaceful human chain, injuring more than 100 protesters injured, according to the Conscious Customers’ Forum.

The unrest eventually spread into the bank itself, halting customer transactions on the first working day after the Eid holidays.

The protests thwarted the scheduled board meeting to formally introduce the new chairman, who was appointed on the eve of the weeklong Eid-ul-Azha holiday starting on May 25 and hours after M Zubaidur Rahman was asked to resign.

The police and Detective Branch (DB) officials were pressuring the acting managing director, Md Altaf Hossain, to hold the board meeting virtually so that the former MD’s resignation could be accepted, according to protesters.

This correspondent observed two senior police officers inside Altaf’s office. Altaf, however, denies any allegation of pressure exerted on him.

Later, the bank sought the BB’s approval to hold the meeting virtually.

Five board members attended the virtual meeting, which was presided over by the new chairman.

At the meeting, the board decided to accept Omar Faruk’s resignation and continue the operations under Altaf’s leadership, BB Spokesman Arief Hossain Khan told The Daily Star.

Around noon, Dhaka Metropolitan Police (DMP) spokesperson Deputy Commissioner (Media) NM Nasiruddin told The Daily Star that police had repeatedly requested the demonstrators to clear the area, as it is a busy commercial zone and their presence could disrupt business activities.

The demonstrators behaved aggressively towards the police. As they refused to leave, police used water cannons and sound grenades to disperse them, he said.

Amid the protest, BB Spokesman Khan told journalists that no banking decision would be determined by street protests, stressing that the central bank would act strictly in accordance with the law and institutional interests, free from any form of pressure or emotion.

All decisions would be made through established legal and regulatory processes, he said.

Meanwhile, following yesterday’s police action, the protesters also demanded the resignation of the central bank governor.

The resignation of Islami Bank’s chairman and MD is an unlawful interference by the government, said Nur Nabi Manik, president of the Islami Bank Affected Customers’ Coordination Council.

Shareholders and customers immediately demanded the cancellation of Khurshid’s appointment, he said, while calling the new Islami Bank chairman an associate of S Alam Group.

Manik also called for Omar Faruk’s reinstatement as the MD.

However, BB ignored the customers’ demands and continued efforts to facilitate the return of individuals linked to the S Alam Group to Islami Bank, he said.

The group has announced a human chain programme today in front of Islami Bank branches all over the country.

The central bank remains defiant.

The BB spokesman stressed the governor’s firm stance against political interference in the central bank and commercial banks.

Bank officials have been encouraged to report any political pressure directly to the governor, who has pledged to personally address such issues if necessary.

BB further warned against associating any bank with a particular political party, saying that such identification poses a serious threat to a bank’s long-term sustainability.