DHAKA, June 12, (V7N)– Bangladesh Bank (BB) Governor Md. Mostaqur Rahman today stepped forward to firmly reassure depositors of Islami Bank and other financially stressed banking institutions, declaring that the central bank is fully armed with the liquidity mechanisms and regulatory tools required to safeguard their funds and keep the financial sector stable.
"Our first priority has been to stabilize the banking sector and then recapitalize it," Governor Rahman stated during a high-profile post-budget press conference held at the Osmani Memorial Auditorium. He stressed that restoring absolute public confidence in the national financial ecosystem remains the core directive of the central bank under his leadership.
Answering questions from journalists, the governor candidly detailed the severe structural damage inherited by the current administration when he assumed office on February 26. He revealed that nearly one-third of the total banking sector deposits had effectively been siphoned out through institutional irregularities and predatory lending practices, driving non-performing loans (NPLs) to a staggering 35-36%.
Governor Rahman also forcefully pushed back against online speculation regarding government interference at Islami Bank and Sammilito Islami Bank, characterizing the social media claims as deliberate rumors designed to trigger market panic.
Addressing the timeline at Sammilito Islami Bank, Rahman clarified that when the new administration took over, the bank was paralyzed—its chairman had resigned, and the selected managing director (MD) had refused the post. The central bank rapidly stepped in to run a thorough recruitment, interview, and approval process, successfully instating a new MD by late May. He added that the newly restructured board recently held its inaugural meeting, and the bank is operating entirely within normal parameters.
Turning to Islami Bank, the governor noted that the state-appointed board has remained stable, save for the removal of a single member following targeted allegations of misconduct. He underscored that neither the government nor the central bank dictating internal commercial decisions, promotions, or transfers.
While acknowledging that uncertainty had triggered an uptick in deposit withdrawals, Rahman issued a binding guarantee to the public regarding liquidity access. “There is no reason for depositors to worry. They can withdraw their money freely at any time,” he assured.
The central bank chief did, however, point to a looming regulatory violation at Islami Bank, noting that its Advance-to-Deposit Ratio (ADR) surged from 93% in July 2024 to nearly 98% by March of this year—sailing well past the mandatory 92% ceiling imposed on Islamic banking institutions. The central bank has already issued formal directives ordering Islami Bank’s leadership to scale down the ratio to fortify its financial buffers, promising emergency liquidity injections if necessary.
Beyond major commercial banks, Governor Rahman announced that the resolution pathways for several long-suffering Non-Bank Financial Institutions (NBFIs) are now finalized. Depositors who have seen their savings frozen for years will finally begin receiving scheduled payouts in the coming weeks.
On the geopolitical and anti-corruption front, the governor highlighted that a specialized Asset Recovery Task Force alongside a Joint Investigation Team is actively collaborating with global law enforcement agencies to track down and claw back billions in public funds laundered overseas. While acknowledging that international asset recovery is notoriously slow, Rahman took a hard line against financial criminals: "We will continue to chase those who looted public money wherever they are."
Looking toward modernization, the governor announced a major digital shift, revealing that a unified “Bangla QR” system will become strictly mandatory across Bangladesh starting July 1, paving the way for full interoperability across all payment applications and pushing the country closer to a cashless economy.
The press conference also featured key financial updates from Finance Secretary Dr. Md. Khairuzzaman Mozumder, who projected the national budget deficit for the FY2026-27 cycle at Tk 2.43 lakh crore, signaling a strategic policy pivot away from central bank borrowing toward public-private infrastructure investment.
Concluding the briefing, National Board of Revenue (NBR) Chairman Md. Abdur Rahman Khan delivered a definitive policy stance on tax compliance, confirming that the upcoming budget contains absolutely zero provisions or loopholes for whitening undisclosed income, widely known as "black money."'
END/AJ/RH/
