Islami Bank Bangladesh PLC has sought Tk 10,000 crore in liquidity support from Bangladesh Bank amid large deposit withdrawals, which led to the deficit at capital reserve ratio (CRR).

Bangladesh Bank and Islami Bank officials said that the bank had requested emergency liquidity assistance from the central bank after its reserve position had come under pressure following recent developments surrounding the appointment of former Bangladesh Bank deputy governor Khurshid Alam as the bank›s chairman.

According to the official, depositors have withdrawn more than Tk 4,200 crore from the bank in a week, leading to a significant decline in its cash position and resulting in a shortfall in CRR maintenance.

Under banking regulations, banks are required to maintain minimum level of cash reserves with the central bank.

Cash Reserve Ratio refers to the portion of total deposits that banks must keep in cash with the central bank. In Bangladesh, banks are generally required to maintain an average CRR of 4 per cent.

The official said that Islami Bank›s current account balance with Bangladesh Bank, which included balance of CRR, had declined sharply to Tk 1,600 crore on Tuesday from Tk 7,015 crore on June 1, prompting the bank to seek Tk 10,000 crore in liquidity support.

Bangladesh Bank director and assistant spokesperson said that the central bank has been monitoring the situation deeply and ready to give any necessary support.

Regarding liquidity support, he said that the bank has requested Tk10,000 crore and the central bank would take decision after reviewing the application.

The bank had previously faced severe liquidity stress after the S Alam Group allegedly borrowed large sums from the institution through various entities during the Awami League regime.

However, following the political transition in August 2024, the bank had shown signs of recovery.

Within months, it managed to overcome its reserve shortfall and rebuild its balance with the central bank.

The latest liquidity pressure emerged after changes in the bank›s leadership.

On May 24, chairman M Zubaidur Rahman and managing director Omar Faruq resigned.

Later on the same day, Khurshid Alam was appointed the chairman of the bank.

Since then, a group of customers has been protesting against the appointment under different banners.

The protesters alleged that Khurshid Alam’s appointment was made irregularly and expressed concern that it could facilitate the return of the influence of controversial S Alam group and his allies.