What Is Happening at Islami Bank?
Islami Bank Bangladesh is facing a financial and management crisis that has now reached the streets. A clash outside its headquarters on September 14 left at least 55 people injured, as dismissed employees demanded their jobs back while customers protested against what they described as the return of the S Alam-era influence. Behind the confrontation are questions over irregular recruitment, massive loan exposure, losses and the bank's efforts to recover from years of financial stress.
In a Nutshell
- Islami Bank, once one of Bangladesh's strongest private banks, reported a Tk1,316 crore loss in the first six months of 2026. compared with a Tk67.4 crore profit during the same period last year. Its retained earnings also moved into negative territory.
- The bank's financial problems have been linked to a large volume of non-performing and non-income-generating investments, including exposure connected to the S Alam Group.
- The bank has also seen deposits decline by more than Tk17,000 crore during the first six months of 2026.
- Following this, a group of employees, who were appointed during the S Alam Group's period of control, were dismissed and now they are demanding reinstatement.
- On September 14, in a clash outside Islami Bank's headquarters in Motijheel, between dismissed employees and members of the Sachetan Grahak Forum at least 55 people were injured.
- The customer group is opposing their return and calling for action over alleged irregularities from the previous management period.
Context
The latest confrontation is connected to a much bigger dispute over how Islami Bank is being rebuilt after S Alam Group's control ended. Employees who were dismissed from the bank, particularly from the Chattogram region, say they were unfairly removed, are demanding their jobs back, and argue that individual employees should not be punished collectively for allegations concerning the recruitment process.
The customer group takes the opposite position. It alleges that many appointments during the S Alam period were irregular and that some employees were recruited using questionable or forged certificates. The group now demands that the bank continue its restructuring rather than reinstate those employees. The disagreement escalated on September 14, when the two sides clashed outside the bank. At least 55 people were injured.
Why It Matters
Islami Bank holds the deposits and savings of a huge number of ordinary people. When a major bank suffers large losses, loses deposits and becomes dependent on regulatory support, concerns about its financial stability can quickly become concerns for its customers. The present management is therefore dealing with two problems at once, repairing the bank's finances and rebuilding public confidence.
What We Think
The clashes outside the Islami Bank are about more than jobs. They reflect a wider loss of trust in a bank struggling with bad loans, mounting losses, falling deposits and allegations of irregular lending and recruitment during the S Alam era. The dispute over dismissed employees also calls for a fair, case-by-case review: staff who did nothing wrong should not suffer simply because they were recruited during that period, while anyone involved in fraud or irregular appointments should not be brought back through pressure or influence. For depositors, however, the main question is simpler: can the bank recover its loans, stabilise its finances and prove that their savings are safe?