Bangladesh Bank appoints observer at Islami Bank amid bankers’ concerns

Bangladesh Bank (BB) today, Wednesday appointed its Executive Director Mohammad Ashraful Alam as an observer of Islami Bank Bangladesh Limited as it is exposed to an operational and liquidity crisis amid uproars over the appointment of its new chairman.

According to a BB statement Alam’s appointment under the Bank Company Act, 1991 was aimed at strengthening oversight, protecting depositors' interests, and ensuring stability in the banking sector.

It said the appointment sought also to safeguard the interests of the bank, its depositors, and the broader public while enhancing transparency, accountability, and good governance within the institution.

Section 49(1)(gh)(aa) of the act empowers an observer to closely monitor banks overall operations and governance framework.

The Bangladesh Bank statement said Alam would attend Islami Bank’s Board of Directors meetings and participate in other relevant activities.

It said he was also tasked to report to the central bank his observations and information on the Islami Bank's operations.

The central bank called the appointment as part of its continued efforts to strengthen regulatory supervision of the country's banking sector amid ongoing concerns over governance and financial discipline in some banks.

“By placing an observer at Islami Bank, the regulator (BB) aims to ensure closer monitoring of management decisions and operational activities, thereby reinforcing depositor confidence and institutional stability,” the statement said.