Bangladesh Bank has annulled the appointments of Islami Bank’s chairman and all board directors to restore depositor confidence amid a severe liquidity crisis. The central bank appointed its executive director, Mohammad Zahid Hossain, to assume full board responsibilities. The decision was announced on Sunday following a meeting between the central bank and Islami Bank’s top officials, invoking powers under sections 45 and 47(3) of the Bank Company Act, 1991.

Earlier the same day, Bangladesh Bank provided Islami Bank with a special loan of Tk 2,500 crore at 11.5 percent interest for 90 days to ease the liquidity crunch. The crisis began after the appointment of Khurshid Alam as chairman triggered unrest among depositors and shareholders, leading to massive withdrawals. The bank’s current account balance had dropped to Tk 439 crore, halting check settlements and ATM operations.

Despite the emergency support, Islami Bank branches continued facing heavy withdrawal pressure, with customers limited in cash access. The central bank stated it is closely monitoring the situation to ensure financial stability and depositor protection.