Citing severe financial irregularities and governance failures, Bangladesh Bank has officially dissolved the board of ICB Islamic Bank to protect depositors’ interests and restore discipline in the banking sector.
On Wednesday, Bangladesh Bank sent an official letter to ICB Islamic Bank announcing the dissolution of its board of directors. The central bank stated that the move was necessary to safeguard the interests of depositors and the bank itself, and to ensure good governance within the financial institution.
The directive highlighted several serious concerns, including the board’s management failures that led to substantial capital and provision shortfalls, massive classified investments, accumulated losses, management instability, and an acute liquidity crisis. The order further stated that the board’s weak policy decisions were responsible for deteriorating the bank’s financial health and disrupting banking discipline.
“In accordance with the powers conferred under the Bank Company Act, and in the interest of depositors and the public, the existing board of ICB Islamic Bank is hereby dissolved,” the directive read.
To maintain continuity in operations, Bangladesh Bank has appointed its Executive Director, Mojibur Rahman, to oversee the bank’s activities, exercising the powers of both the board and managing director temporarily. The management of the bank has been instructed to cooperate fully with the appointed official.
ICB Islamic Bank, originally established in 1987 as Al-Baraka Bank, has long struggled with operational and financial challenges. It was declared a “problem bank” in 1994. The central bank had introduced a supervisory mechanism for troubled banks and took control of the institution when it became Oriental Bank in 2004.
In June 2006, the Oriental Bank board was also dissolved due to widespread corruption and irregularities, including the embezzlement of approximately Tk 34 crore, which led to 34 cases being filed in 2005 and 2006.
After assuming full control, Bangladesh Bank appointed an administrator to protect depositors’ funds. In 2007, the bank’s shares were put up for sale, attracting bids from entities including Swiss-based ICB Group. The following year, the bank was renamed ICB Islamic Bank.
Liberty News’ economic correspondent reports that despite the changes, the bank has continued to face a deepening liquidity crisis since 2008, and Wednesday’s action marks the latest intervention by Bangladesh Bank to stabilize the troubled institution.
LND/BG
