Written by The Banking Post
In a major regulatory intervention, Bangladesh Bank (BB) has dissolved the entire board of Islami Bank Bangladesh PLC, including its newly appointed chairman, in a move aimed at protecting depositors and safeguarding public funds.
The central bank removed all directors of the country’s largest Shariah-based commercial bank with immediate effect under powers granted by the Bank Company Act, 1991.
According to a circular issued on Sunday, the appointments of the chairman and all existing board members have been cancelled.
BB said the decision was taken in the public interest to ensure good governance and maintain stability in the banking sector.
To ensure uninterrupted operations, the central bank has transferred all powers and responsibilities of the dissolved board to Mohammad Johir Hossain, an executive director of Bangladesh Bank.
Under Section 47(3) of the Bank Company Act, he will exercise full managerial and administrative authority as the bank’s administrator.
The sweeping move comes amid growing scrutiny over the bank’s governance, persistent liquidity stress and mounting concerns over management-related controversies.
Market analysts say the regulator’s direct intervention signals a tougher stance on troubled banks, particularly those facing governance failures and financial instability.
However, analysts also cautioned that it remains too early to assess whether the board takeover alone will restore normal banking operations, rebuild depositor confidence and stabilise the lender’s financial position.
The development marks one of the strongest regulatory actions in recent years, underscoring Bangladesh Bank’s efforts to tighten oversight and reinforce discipline in the banking sector.
