Bangladesh Bank has provided Islami Bank Bangladesh PLC with a special liquidity support of Tk 2,500 crore in an effort to ease the bank’s mounting cash shortage triggered by large-scale deposit withdrawals, bank officials said on Sunday.

The emergency funding came days after the country’s largest Islamic bank sought Tk 10,000 crore in liquidity assistance from the central bank following a sharp deterioration in its reserve position.

According to Islami Bank officials, the central bank released the Tk 2,500 crore support on Sunday to help the bank meet withdrawal demands and stabilise its liquidity situation.

The bank has been facing renewed pressure since the Eid holidays amid controversy surrounding the appointment of former Bangladesh Bank deputy governor Khurshid Alam as its new chairman.

A section of customers, operating under the banner of the Conscious Customers’ Forum, has been staging continuous protests against the appointment.

Bank officials said that the unrest triggered a wave of deposit withdrawals, with depositors reportedly withdrawing around Tk 6,000 crore in recent weeks.

The outflow significantly weakened the bank’s liquidity position and led to a shortfall in maintaining the mandatory cash reserve requirement with Bangladesh.

On Thursday, the bank’s balance in its principal account with the central bank declined to about Tk 400 crore from Tk 7,015 crore, prompting management to seek Tk 10,000 crore in liquidity support.

The bank had earlier suffered severe liquidity stress and reserve shortfalls but showed signs of recovery after the political transition in August 2024.

The fresh deposit withdrawals, however, have renewed concerns over the bank’s liquidity and depositor confidence.

Bangladesh Bank governor Md Mostaqur Rahman had hinted at possible support during a post-budget press conference on Friday.

He expressed confidence that the bank’s difficulties would be resolved soon and assured depositors that they would not face problems in withdrawing their funds.