United News of Bangladesh

In a dramatic regulatory move, Bangladesh Bank on Sunday dissolved the entire Board of Directors of Islami Bank Bangladesh PLC, including its newly appointed chairman, in what it said was a move to protect the interests of depositors and safeguard public money. The central bank removed all directors of the country’s largest Shariah-based commercial lender with immediate effect under the powers vested in it by the Bank Company Act, 1991. BB appoints observer to Islami Bank to restore discipline, protect depositors Bangladesh Bank Assistant Spokesperson Shahriar Siddiqui confirmed the development, noting that the unprecedented step was taken in the public interest to ensure good governance and maintain stability across the banking sector. According to a circular issued by the central bank on Sunday evening, the appointments of the chairman and all existing directors on the board have been cancelled. To maintain continuity in the bank's administration and supervisory operations, the central bank has vested all powers and duties of the dissolved board in Bangladesh Bank Executive Director Mohammad Johir Hossain.  He will exercise full managerial and administrative authority under Section 47(3) of the Bank Company Act, 1991, effectively serving as the administrator. The sweeping intervention follows intense scrutiny, severe liquidity challenges, and public controversies surrounding the management and leadership changes at Islami Bank. Financial analysts believe it is too early to tell whether the direct takeover of the board by the regulatory authority can indeed be a step towards restoring regular financial operations, calming panic-stricken depositors, and stabilizing the country's broader financial landscape.

Bangladesh Association of Banks (BAB) has strongly demanded the swift identification and legal recovery of embezzled and looted funds from the banking sector to protect the interests of ordinary depositors. Welcoming the proposed national budget for fiscal year 2026-27, the apex body of private commercial bank owners, stated that merely recapitalising weak banks will not make the financial sector sustainable in the long run unless past irregularities and financial plundering are effectively resolved. Steps underway to resolve Islami Bank crisis, emergency liquidity support to be provided: Governor Abdul Hai Sarker, Chairman of BAB issued a post-budget statement following the presentation of the national budget in parliament. The government has allocated approximately Tk 40,000 crore for weak banks, which it termed a crucial step toward restoring stability in the banking sector. However, the association emphasised that to reap the actual benefits of this recapitalisation, the immediate recovery of looted assets must be ensured simultaneously. Strengthening banks with public money can only be successful when those who abused these funds are held strictly accountable, BAB added. The organisation further stressed that visible and punitive actions against those responsible are imperative to rebuild depositors' trust. "Legal action must be taken against willful defaulters and those who have crippled the banking system. Under no circumstances should they be allowed back into the financial sector," the statement reads, adding that such steps would not only restore financial discipline but also deter future irregularities. As part of comprehensive banking sector reforms, BAB highlighted the necessity of forming an effective Asset Management Company (AMC). Such an institution could play a pivotal role in reducing non-performing loans (NPLs) of weak banks and strengthening their balance sheets, it said. BAB also called for clear and transparent policy formulation regarding the management and disposal of shares and assets acquired through illicit financial irregularities. Warning of potential long-term risks, the association cautioned that if the recovery process is not executed effectively, bailouts using state funds will only offer temporary relief without yielding the desired structural results. It urged the government to implement a tripartite approach focusing equally on "Reform, Recovery, and Accountability" alongside the recapitalisation process.

Bangladesh Bank Governor Md. Mostaqur Rahman has assured depositors of Islami Bank Bangladesh PLC that the central bank is taking immediate measures to resolve the bank's liquidity challenges, including providing emergency liquidity support. "Depositors will not face any inconvenience. They will be able to withdraw their money at any time," the Governor said while responding to questions from journalists regarding the banking sector at a post-budget press conference for FY2026-27 held at the Osmani Memorial Auditorium in Dhaka on Friday. BB appoints observer to Islami Bank to restore discipline, protect depositors He stated that the central bank has a number of regulatory tools at its disposal to manage the situation, and some of these collective measures will be implemented within the coming days. The Governor's remarks come at a time of heightened concern over mounting liquidity pressures at the country's largest Shariah-based commercial bank, which has sparked growing anxiety among depositors regarding regular access to their funds. Governor Rahman explicitly confirmed that any necessary emergency liquidity support required to stabilize Islami Bank will be fully provided by the central bank to safeguard public deposits and maintain overall financial sector stability.

Bangladesh Bank Governor Md. Mostaqur Rahman on Friday issued a stern warning against financial fraudsters, declaring that those involved in money laundering will not be allowed to live in peace in Bangladesh. "We will not let those who have stolen the country’s money and smuggled it abroad stay in peace. The ongoing drive against money launderers will continue," the central bank governor said. He made the remarks while addressing journalists on contemporary economic issues, including money laundering and financial sector stability, in the post budget press conference. New Bangladesh Bank Governor outlines vision for investment-led growth The Finance Minister Amir Khosru Mahmud Chowdhury, Power and Energy Minister Iqbal Hasan Mahmud Tuku, NBR Chairman Abdur Rahman, Governor Md Mostaqur Rahman, many other ministers and secretaries of different ministries were present. Stating that those who have accumulated wealth through illicit financial flows will face rigorous accountability, the Governor added that the central bank, in coordination with relevant state agencies, is actively working to identify and track down stolen assets. Governor Rahman also assured that specific actions, including legal measures and international cooperation, are being leveraged to bring back the laundered money and penalize the perpetrators. The central bank chief emphasized that ensuring discipline and transparency in the banking sector remains a top priority for the regulatory body, and no concessions will be made for those involved in rampant corruption and financial irregularities. About the liquidity crisis of different banks including Islami Bank, the governor said that the central bank is taking steps to resolve the problem as soon as possible.

In a major move to restore discipline and protect depositors’ interests, Bangladesh Bank (BB) on Wednesday appointed its Executive Director Md Ashraful Alam as an observer to Islami Bank Bangladesh PLC. The appointment was made with immediate effect, according to a press release issued by the central bank. Depositors’ forum issues 24-hour ultimatum over Islami Bank board chief removal It stated that the strategic intervention aims to closely monitor the overall operations of the country’s largest Shariah-based private commercial bank, safeguard its corporate interests, protect the rights of its massive depositor base, and ensure broader public interest. As part of his official mandate, Ashraful Alam will actively participate in the meetings of Islami Bank's Board of Directors and other relevant top-tier administrative proceedings. He will also be responsible for providing critical operational data, assessments, and regular updates directly to the central bank. The regulatory intervention comes amid escalating protests and deep-rooted instability surrounding the bank’s corporate governance. Bangladesh Bank emphasised its core commitment to ensuring stability, good governance, transparency, and accountability across the country’s financial sector. It expressed optimism that the deployment of a senior regulatory observer will be pivotal in restoring public trust, enhancing transparency, and reinforcing discipline within the daily operations of Islami Bank.

The Asian Development Bank (ADB) on Wednesday hosted a Business Opportunities Seminar (BOS) in Dhaka to highlight business opportunities arising from ADB-financed and World Bank-financed projects. The event brought together over 800 representatives from government agencies, development partners, the private sector, contractors, consultants, suppliers, and financial institutions to foster collaboration and enhance participation in development projects, according to a press release. Multi-systemic risks due to institutional weaknesses affecting governance, fiscal environment: ADB The BOS provided a platform to share information on upcoming investment programs, procurement opportunities, private sector operations, and business opportunities arising from ADB and World Bank-financed projects in Bangladesh. S.M. Moin Uddin Ahmed, CEO of the Bangladesh Public Procurement Authority and Sangita Ahmed, Senior Vice President, Bangladesh Women Chamber of Commerce and Industry also participated in the event. Akira Matsunaga, Deputy Country Director (Officer in Charge), ADB Bangladesh Resident Mission; Jean Pesme, Division Director for Bangladesh and Bhutan, World Bank, and S. M. Jakaria Huq, Additional Secretary and ADB Wing Chief, Economic Relations Division (ERD), addressed participants during the opening session. “Bangladesh’s development ambitions will require not only financing, but also strong partnerships and effective implementation,” said Matsunaga. “Forums such as today’s seminar help strengthen collaboration among government, development partners, and the private sector to deliver sustainable development outcomes.” Pesme highlighted the importance of collaboration among development partners, government institutions and the private sector in supporting Bangladesh’s next phase of development. Huq reaffirmed the Government of Bangladesh’s commitment to transparency, fair competition, and effective implementation of development-financed projects. The BOS served as a valuable platform for networking and knowledge sharing among stakeholders, helping participants better understand upcoming opportunities and how to engage effectively in development financed projects. ADB reaffirmed its commitment to supporting private sector participation and strengthening partnerships that contribute to Bangladesh’s sustainable, inclusive, and resilient development. 

Bangladesh Bank (BB) has formed a new Tk 10,000 crore refinancing scheme from its own funds to boost agricultural production, ensure food security, and create employment opportunities in rural areas. Under the five-year scheme, farmers will be able to access low-interest loans capped at an 8 percent interest rate. Bangladesh Bank buys $85 million in a single day to maintain exchange rate stability The Agricultural Credit Department of the central bank issued a circular in this regard last night (Monday night), sending it to the chief executives of all scheduled banks.  The initiative aims to financially empower genuine farmers and rural entrepreneurs. Small, marginal, sharecroppers (Borga chashi), and women farmers will receive top priority under this fund. To identify genuine beneficiaries, banks will utilise information from the local departments of agriculture, fisheries, and livestock, or the government-issued Farmer Cards . In an effort to ease access, small and marginal farmers will be eligible to secure collateral-free loans of up to Tk 5 lakh solely against the liability of their crops and produce. Furthermore, instead of immovable property, personal or group social guarantees will be considered as acceptable collateral for women and marginal farmers. According to the central bank circular, any farmer or client who is a loan defaulter with any bank or financial institution will be disqualified from receiving loans under this scheme. Additionally, the central bank strictly specified that these loans cannot be used to repay or adjust any existing or past debts. An individual beneficiary will be permitted to avail themselves of the facilities under this refinancing scheme a maximum of three times.

Kazi Shairul Hassan has been appointed new chairman while Abedur Rahman Sikder new managing director (MD) of Sammilito Islami Bank PLC, which was formed through the merger of five troubled Islami banks. The Financial Institutions Division (FID) of the Ministry of Finance announced the leadership changes through two separate notifications issued on Monday. According to the government orders, both the chairman and MD have been appointed for a three-year term, effective from their respective dates of joining. Chairman of Sammilito Islami Bank Mohammad Ayub Mia resigns Shairul Hassan earlier served as managing director of Saudi Bangladesh Industrial and Agricultural Investment Company (SABINCO), while Abedur Rahman is the current deputy managing director (DMD) of Dutch-Bangla Bank. Industry insiders and financial analysts view these high-level appointments as a crucial step towards stabilising and reforming the specialised lender. The new leadership is expected to streamline corporate governance, accelerate business expansion, fortify risk management, and restore depositor confidence through improved customer services. Sammilito Islami Bank operates as a major Shariah-compliant financial institution in the country. The fresh appointments of the chairman and MD are considered a defining milestone in a series of ongoing structural and managerial overhauls intended to steer the bank towards long-term sustainability. Sammilito Islami Bank was established by the previous interim government last year by merging Exim Bank, First Security Islami Bank, Global Islami Bank, Union Bank, and Social Islami Bank Limited.

Administrative action will be taken against anyone disrupting customer services, said Islami Bank acting Managing Director Md. Altaf Hossain on Thursday amid reports of a symbolic work stoppage at several branches. The warning came after a section of bank officials reportedly observed a one-hour ‘pen-down’ strike at multiple branches in response to a call from the ‘Sachetan Grahak Forum’ (Conscious Customers Forum), which has been protesting for the past three days demanding removal of newly appointed Chairman Md. Khurshid Alam. The forum on Wednesday urged employees to suspend work for an hour on Thursday in solidarity with its movement. Speaking at the bank’s head office in Dilkusha, Motijheel, Altaf Hossain clarified that the management had issued no instructions for any form of work stoppage. “There is no such directive from our side. If any official refuses to provide services, administrative action will be taken against them,” he said. Customer services were partially or fully disrupted for about an hour in some locations although bank officials largely refrained from making public comments. Responding to the situation, the acting MD said the bank’s staff remain committed to serving customers. “Our officers are fully ready to serve. If customers do not come forward for services, it is not possible for us to force it. It is also difficult to monitor the real-time situation of every branch from the head office,” he said. Asked about concerns over possible withdrawal pressure amid the ongoing unrest, Hossain acknowledged increased activity but said there was no cause for alarm. “If all depositors rush to withdraw their money in a single day, any bank in the world would collapse. That is a basic financial reality. But practically that never happens,” he said. He added that the bank has seen a rise in withdrawal pressure due to the prevailing situation, but it remains within manageable limits. “There is definitely some increased pressure due to the current situation, but it is still tolerable. There is no reason for panic. If any critical situation arises, it will be visible to everyone,” he added. The unrest at the Shariah-based lender began late last month following the resignation of former Chairman Prof. M. Zubaidur Rahman and the central bank's subsequent appointment of former Deputy Governor Md. Khurshid Alam to the post.

Bangladesh is facing mounting economic challenges as weak revenue collection, persistent inflation, banking sector fragility and rising energy costs weigh on the economy, the Centre for Policy Dialogue (CPD) said on Thursday. Presenting the third reading of its Independent Review of Bangladesh's Development (IRBD) FY2025-26 at its office in Dhaka, the think tank said the economy is grappling with a combination of macroeconomic, financial, sectoral and social challenges despite signs of resilience in some areas. The report, titled “State of the Bangladesh Economy in FY2025-26: Multidimensional Challenges during the Transition Period,” was presented by CPD Executive Director Dr. Fahmida Khatun, who said recent developments reflect a mixed picture of resilience and vulnerability. Revenue and Public Finance Bangladesh's revenue mobilisation grew by only 6.9 per cent during July-March of FY26, against a target growth rate of 29.3 per cent. CPD said meeting the annual target would now require an improbable 84.6 per cent growth in the final quarter, calling the revenue mobilisation target “operationally unrealistic.” NBR tax collection fell short of the target by BDT 104,533 crore during July-April FY26, with growth of 10.6 per cent against a target of 34.5 per cent. Closing the gap by June would require 128.6 per cent growth in May-June, a figure the think tank described as near-impossible. ADP implementation stood at just 35.4 per cent during July-April FY26, significantly below the FY17-FY24 average of 49.8 per cent. To finance the widening deficit, the government leaned heavily on bank borrowing, which reached BDT 102,442 crore or 98.5 per cent of the full-year target by March FY26, up 20 per cent from the same period of FY25. CPD warned this could crowd out private sector credit and dampen investment. Inflation and Living Costs Inflation rose to 9.04 per cent in April 2026, up from 8.71 per cent in March, with non-food inflation reaching 9.57 per cent. The Strait of Hormuz blockade triggered sharp fuel price increases between December 2025 and May 2026: diesel rose 15 per cent to BDT 115 per litre, while octane and petrol each surged over 20 per cent. The price of a 12 kg LPG cylinder jumped 40.57 per cent, from BDT 1,341 in March 2026 to BDT 1,885 in June 2026. A CPD market survey of around 1,000 agents across 10 commodities identified green chilies, onions, pulses and brinjals as carrying the highest markups in the supply chain, driven largely by the dominant role of urban aratdars. Banking Sector The banking sector's capital adequacy ratio fell to a historic low of negative 2.93 per cent. Specialised banks collapsed to a CRAR of negative 87.9 per cent in September 2025. While the gross NPL ratio declined from 35.73 per cent in September 2025 to 32.26 per cent in March 2026, CPD said the improvement reflects rescheduling and restructuring rather than any real asset quality recovery. Private sector credit growth fell to a record low of 4.72 per cent in March 2026, constraining investment and job creation. Excess liquidity as a share of total liquid assets rose from 43 per cent in May 2025 to 55 per cent in March 2026, a sign of cautious lending and weak economic activity, CPD said. On regulatory measures, CPD flagged concern over a proposed amendment that would allow former owners of distressed banks to regain control, calling it an accountability risk that could weaken resolution credibility. It also raised concern over a Bangladesh Bank circular raising the single-borrower exposure limit from 15 per cent to 25 per cent of capital until June 2028, warning it could amplify systemic risk. External Sector Bangladesh's overall balance of payments shifted from a deficit of USD 1.1 billion in FY25 to a surplus of USD 3.6 billion in FY26 during July-March, an improvement of USD 4.8 billion. Remittances rose 19.8 per cent during July-April FY26, continuing to serve as a critical external stabiliser. Forex reserves stood at USD 34.57 billion on 23 May 2026. However, CPD cautioned that the BoP improvement was driven largely by debt-creating financial account inflows of USD 3.2 billion, not a genuine improvement in the current account. Exports fell 2.02 per cent during July-April FY26, far below the 14 per cent target. RMG exports declined 2.8 per cent, with knitwear falling 3.7 per cent. Bangladesh lost ground in both the US and EU markets, while Vietnam gained. External debt stood at USD 113.2 billion as of June FY25. Debt servicing costs have more than doubled in five years, from USD 3.2 billion in FY20 to USD 7.2 billion in FY25. The IMF in January 2026 moved Bangladesh to moderate risk from low risk, while Fitch revised its outlook to negative in May 2026. Labour Market CPD said factory closures since August 2024 left between 100,000 and 300,000 workers unemployed. Real wages declined throughout January 2025 to April 2026, with industrial workers bearing real wage contractions of up to 2.1 per cent. Wage-related labour unrest incidents rose from 59 in 2023 to 204 in 2025. Workplace deaths stood at 1,190 in 2025, with at least 186 recorded in the first quarter of 2026 alone. Overall unemployment is expected to remain at 3.8 per cent in 2026, while youth unemployment is projected to rise from 9.1 per cent to 9.7 per cent. Energy Crisis and Haor Floods The Strait of Hormuz blockade exposed Bangladesh's deep vulnerability to imported fuel dependency. CPD estimated that the government will need BDT 31,122 crore in additional subsidies for the energy sector by the end of FY26. The Haor floods of April 2026 damaged an estimated 49,000 hectares of boro cultivation, affecting 236,811 farm households. CPD's own estimate placed rice losses at 339,449 metric tonnes, significantly higher than the official DAE revised figure of 214,000 MT. The government's compensation of BDT 7,500 per farmer, CPD said, covers only 14-18 per cent of per-household production loss. Measles Outbreak CPD characterised the 2026 measles outbreak as a case study in health sector governance failure. Between 15 March and 2 June 2026, the outbreak produced 74,572 suspected cases, 9,191 lab-confirmed cases and 601 deaths. About 72 per cent of cases were among zero-dose children. CPD attributed the outbreak to vaccine stockouts in 2024-2025, the absence of a nationwide MR campaign since 2020, and procurement failures. Recommendations CPD called for broad structural reforms, including expanding the tax base, curbing illicit financial flows and improving ADP implementation. It urged stricter loan classification, greater transparency in rescheduled loans and an end to political influence in banking. The think tank also recommended accelerating gas exploration, expanding rooftop solar, digitising the fuel supply chain, improving agricultural loss assessments, increasing compensation for flood-hit farmers and providing a 12-month loan moratorium. “Bangladesh's recovery requires credible governance reform beyond macroeconomic stabilisation,” said Fahmida Khatun, stressing the need for stronger institutions and accountability to achieve the government's development goals.