The Islamic Development Bank has announced its intention to sell more than two-thirds of its holdings in Islami Bank Bangladesh (IBBL), making it the second major sponsor to do so. At present, IDB holds 7.5 percent of IBBL’s shares and aims to bring its holdings down to around 2 percent, the minimum required for a board seat. IDB believes that Islamic banking is well established and flourishing in Bangladesh, and its withdrawal would not negatively impact the sector. However, IBBL’s chairman, Arastoo Khan, expressed a desire to retain IDB on the board due to its positive influence on quality and governance. The proceeds from the sale are expected to be reinvested in establishing Islamic banks in African countries. Approval from the central bank and the Bangladesh Securities and Exchange Commission is required before the shares can be sold. Foreign shareholders currently hold more than 52 percent stakes in IBBL, including IDB’s 7.5 percent.
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