FROM PAGE 16

Hopefully, you will soon see a balanced and independent board,” said Zahir, an executive director at Bangladesh Bank.

He is serving as a one-member board temporarily to ensure uninterrupted operations during the transition period.

On Sunday night, BB dissolved the entire board of directors of Islami Bank amid massive deposit withdrawals, protests and political controversy triggered by the appointment of Md Khurshid Alam, a former deputy governor of the BB, as its chairman.

“This is an initial victory,” said Nur Nabi Manik, representative of the Conscious Customers Forum, at a briefing yesterday.

The forum has been staging protests since June 1 against Khurshid’s appointment, which eventually contributed to severe liquidity stress at the bank.

Manik presented a seven-point demand, including the immediate formation of a full-fledged board comprising honest, competent and professional individuals through consultation and reinstating Md Omar Faruk as the managing director.

He also demanded that shares allegedly taken forcibly from previous owners be returned.

The protesters will submit a memorandum about their seven-point demand to the BB governor today.

Zahir, however, said Faruk cannot be reinstated as he had already resigned.

“As his resignation has been accepted, there is no scope for bringing him back,” he said.

Meanwhile, large crowds of customers were again seen at various branches yesterday, although Acting MD Md Altaf Hossain said withdrawal pressure had eased somewhat compared with previous days.

To help the bank meet withdrawal demands, BB yesterday provided an additional Tk 2,500 crore in liquidity support, which was not exhausted entirely.

He expressed hope that customers who had withdrawn deposits out of panic would return, noting that account closures at a major branch had fallen by around 75 percent, indicating a gradual recovery in confidence.

The bank has instructed its branches to reactivate certain deposit accounts that were closed and encashed before maturity and to encourage account holders to resume banking transactions in a bid to strengthen cash flow and restore normal banking operations.

In an internal circular issued on Monday, the bank said many customers had become inactive due to the recent situation surrounding the bank, resulting in the closure or dormancy of a number of MTDR (Mudaraba Term Deposit Receipt), MSB, MMPDS and MSS accounts.

Customers whose MTDR, MSB, MMPDS and MSS accounts were closed between June 1 and June 15 will be allowed to reopen those accounts within the next seven working days upon application.

Once reactivated, the accounts will enjoy all regular operational facilities.

The bank has directed all divisions, zones and branches to take immediate steps to contact affected customers through mobile phones and other available means and encourage them to resume transactions.

Earlier yesterday, protesters under the banner of the Conscious Customers Forum held a press conference, describing the central bank’s decision to remove the board as an “initial victory”.

The forum has been demonstrating against the appointment of Islami Bank’s former chairman since June 1. The protests eventually contributed to severe liquidity stress at the bank.

Meanwhile, the Association of Bankers, Bangladesh (ABB) welcomed the BB decision to dissolve the Islami board and facilitate a fresh start for the institution.

In a statement yesterday, ABB Chairman Mashrur Arefin described the move as timely and prudent.

“As the Islami Bank issue had acquired political overtones and given the bank’s systemic importance, ABB expressed its concerns to the governor on June 10.”

The situation was no longer confined to a single institution, and its impact was being felt across the banking sector, it said.

“We believe the decision taken by the central bank is commendable and hope it will restore stability and rebuild the confidence of depositors, investors and other stakeholders.”

ABB said it expects significant progress in governance, accountability, reducing political influence in banking and the recovery of defaulted loans.