The country’s once leading Islami bank in the private sector is now going through a recession. Those concerned believe that the bank has come to this situation today due to the inefficiency of the board of directors and management. Even a year ago, Islami Bank was one of the models of the country’s banking sector with enviable success in every indicator of the banking sector.
Islami Bank was on a positive trend. The bank is no longer in its previous position due to being under the control of annon-professional group. Bank officials fear uncertainty in the future regarding the salaries of officials and employees and the payment of profits to depositors. They say that if there is no profit, the pressure to withdraw deposits will increase further. As a result, the overall condition of the bank will deteriorate further.
It is said that the most important indicator of the bank is operating profit. According to Islami Bank sources, in 2024, Islami Bank’s operating profit was Tk 3,400 crore. Despite various instabilities including rumors, propaganda, political unrest, and government collapse throughout the year, Islami Bank achieved record operating profit as always. The bank has started facing losses since the beginning of 2025. By the end of March, this loss had reached nearly Tk 1,000 crore.
An official of the bank, speaking on condition of anonymity, said, “If this continues, the payment of salaries to officers and employees will become uncertain after June, it will not be possible to pay profits to depositors, and if profits are not received, deposits will start being withdrawn. As a result, the bank’s condition will deteriorate further.”
Another important indicator is classified investment. Before the August 5 change of direction, the bank’s classified investment was a maximum of 4 percent. After the new board and management took office, the bank is now facing business losses due to their inexperienced and unprofessional policies. According to sources, the classified investment rate at the end of the latest March quarter was 32 percent, which is Tk 45,000 crore in terms of money. Against this, provision of Tk 14,000 crore has to be kept, while the bank has only Tk 700 crore. Due to which the bank will definitely fail to achieve the desired profit.
In this context, a senior official of the bank, on condition of anonymity, told this reporter that the investment of S Alam Group is very small among the classified investments, a large amount is from other customers. When the investment of S Alam Group is classified in June, September and finally in December, the situation of the bank will be dire. As a reason for this, he mentioned that the current board or management authority has no initiative to reduce the amount of classified investments. A source said that the current authority is spending more time on promotions and postings instead of banking business. Their attention is weak on realizing investments. They are only passing time hoping to regularize the distributed investments through rescheduling at the end of the year and a rescue package of 40 to 50 thousand crore taka from Bangladesh Bank.
The bank’s main source of income was remittances and foreign trade. After the new management took charge, remittances have plummeted. Previously, the bank used to collect up to 35 percent of remittances alone, but it has gradually come down to 16.43 percent, as can be seen from the Bangladesh Bank website. Due to the impact of the decline in remittances, the bank’s import trade is also declining. And due to the lack of support for export-oriented industries, good exporters are moving to other banks. As a result, export income is also declining. Considering the trend of import-export, the leading bank in foreign trade is now in a downward trend.
Asked to talk about the way out of this, a senior management official, who did not want to be named, said that if the central bank creates an environment of compromise with the businessmen and introduces revolving facilities and allows them to open LCs within new limits, classified investments will decrease significantly. The entire banking sector is now at risk due to some decisions that are not business-friendly. If they do not just reschedule and give them the opportunity to do business, the distributed investments will become classified again after three months. In addition, due to the ongoing investigation into corruption in investment files, none of the branch officers, managers, zone heads and head office officers and senior management authorities are willing to take responsibility. The officials are passing time by ignoring their responsibilities in any way. He also commented that it will not take long for the bank to deteriorate further due to the reluctance of senior officials to fulfill their duties.
