In a recent decision, branch managers and even divisional and regional heads of Islami Bank Bangladesh Limited (IBBL) will no longer have the authority to approve loans, and they will also be unable to increase loan limits. The ratio between loans and deposits has exceeded the norm due to a higher amount of loans compared to deposits. Efforts are underway to stabilize operations by sourcing funds from various banks, including the Bangladesh Bank. The bank has resorted to imposing regular fines for failing to maintain required deposit ratios. Despite this, a significant portion of deposits remains unchannelled to the central bank.
According to information from the Islami bank, nearly 30% of the country’s foreign exchange earnings, remittances, and expatriate incomes are facilitated through bank accounts. A substantial portion of depositors, primarily from districts and sub-districts, are affected, with two million customers having entrusted nearly 450 million Bangladeshi Taka in these banks. Most of these depositors are located in districts and upazilas. The crisis has prompted a series of share transfers to foreign entities, leaving the bank under the control of overseas representatives. In 2017, multiple shares were sold to foreign companies, leading to changes in the bank’s management.
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