From Vision to Volatility: The Islami Bank Journey

After independence, establishing the concept of Islamic banking in the country's banking history was a huge challenge. Against that backdrop, through the innovative strategies and relentless efforts of domestic and foreign entrepreneurs, Islami Bank commenced its journey in 1983. Since then, the bank has steadily progressed over 44 years.

Despite facing various obstacles throughout this long journey, it never stopped. Overcoming numerous barriers and adversities at different times, the bank has earned a reputation beyond the country's borders. In the middle of its journey, due to some untoward incidents, foreign investors left. Since 2017, the bank had been controlled by Bangladesh's much-discussed industrial group, S. Alam Group. However, after the fall of the Awami League government in 2024, the interim government brought about sweeping changes to the bank. Along with restructuring its board of directors, nearly five thousand employees across the country were dismissed. Since then, the chairman has been changed multiple times. Most recently, new instability has essentially begun with the appointment of a new chairman.

There are allegations that after the 2024 uprising, supporters of Bangladesh Jamaat-e-Islami took control of the bank again. They allegedly arranged the board according to their preference. Many economists believe that after coming to power, the BNP government now wants to restructure the bank to suit themselves. This is primarily why responsible positions at the bank are being changed once again.

On the 24th of last month, Md. Khurshid Alam was appointed as the new chairman of the bank. However, a faction has launched protests under the banner of the "Islami Bank Conscious Customers Forum" demanding the cancellation of his appointment. Banking sector insiders believe there are political motives behind this. They say the battle to keep Islami Bank under their own control is still ongoing.

However, those protesting under the banner of the Islami Bank Conscious Customers Forum claim they have taken to the streets out of fear that under the new chairman's leadership, the bank might again fall under the control of a particular group.

Currently, Islami Bank has deposits totaling 1 lakh 83 thousand crore taka. The number of depositor accounts is approximately 3 crore 30 lakh. The vast majority of Islami Bank's deposits come from individual customers. People from all classes and professions across the country are its customers. Nearly 8 crore people in the country are directly or indirectly involved with Islami Bank. There are approximately 400 branches spread across the country. Under these branches, 271 sub-branches and 2,788 agent banking outlets are operating. Along with the capital and cities, Islami Bank has a presence in nearly 50 percent of the country's villages.
Islami Bank has a total of 161 crore shares. Among these, the S. Alam Group now controls 131 crore 35 lakh 99 thousand shares, which is 81.59 percent of the total shares. Based on the political polling service market price of 42 taka per share for Islami Bank, the market value of S. Alam's shares stands at 5,596 crore taka. Questions have also been raised about the process by which S. Alam acquired this massive ownership. There are allegations that the group siphoned off 1 lakh 30 thousand crore taka from the bank and laundered it abroad.

After the 2024 popular uprising, former banker Obaidullah Al Masud was made chairman. Customers protested against him. But the government did not take that into account and kept him in place. However, he is currently in jail in a corruption case. Later, Bangladesh Bank Governor Mostakur Rahman appointed Dhaka University professor Jobaidur Rahman as chairman. In the meantime, on May 24, Bangladesh Bank forced him to resign. On the same day, former Deputy Governor Khurshid Alam was appointed as the new chairman. However, protests continue over his appointment.

While many have raised questions about the ongoing protests, there is also criticism regarding decision-making in the banking sector based on political considerations. Economists and banking sector insiders say the institution has become a center of takeover and counter-takeover with changes in the country's political power.

Professor Dr. Ahsan Habib of the Bangladesh Institute of Bank Management said, "Islami Bank is a pillar of the banking system. The bank plays a unique role in employment, business, investment, and remittances."

According to Altaf Husain, acting MD of Islami Bank, "The current crisis is not just a problem of one bank. It is an important issue for the entire banking sector. We are trying everything to bring Islami Bank back to its former place through good governance and trust. It can be hoped that the crisis will be overcome in time."