The Association of Bankers, Bangladesh (ABB) has welcomed the decision of the Governor of Bangladesh Bank to dissolve the existing board of directors of Islami Bank including its chairman, and facilitate a fresh start for the institution.
In a statement issued Monday from the office of ABB chairman and MD of City Bank, Mashrur Arefin, the association described the decision as timely and prudent for the banking industry.
The statement read: “As the Islami Bank issue had acquired political overtones and given the bank’s systemic importance, ABB had expressed its deep concern to the governor on June 10. We conveyed that an early resolution would be beneficial for the industry, as the situation at Islami Bank was no longer an issue concerning a single institution; its impact was being felt across the banking sector. As the issue had assumed a political dimension, we also advised that efforts be made to resolve it through dialogue and consensus among the relevant stakeholders. In this context, we believe the decision taken by the central bank is commendable. We hope it will restore stability at Islami Bank and rebuild the confidence of its depositors, investors and stakeholders.”
With nearly 30 million customers, a vast deposit and investment base, the country’s largest remittance network and a major role in international trade finance, the stability of Islami Bank is not merely its own concern; it is directly linked to the stability of Bangladesh’s overall economy, the ABB statement also said.
“The recent mob-driven protests had created deep concerns among bankers regarding the bank’s governance, liquidity and the confidence of depositors and foreign investors. We believe the central bank’s decision will help allay these concerns.”
The message concluded: “In the interest of the banking sector, we expect substantial progress in Islami Bank in terms of good governance, accountability, a banking environment free from political influence, and the recovery of its huge non-performing loans. We also hope that all conscientious citizens will appreciate that mob influence in the banking sector is an ominous signal for this industry. We urge the higher authorities of the government to treat this matter with utmost seriousness.”