Islami Bank to reactivate closed deposit accounts to boost cash flow

Amid ongoing liquidity pressures, Islami Bank Bangladesh PLC has instructed its branches to reactivate certain deposit accounts that were closed and encashed before maturity and to encourage account holders to resume banking transactions in a bid to strengthen cash flow and restore normal banking operations.

In an internal circular issued today, the bank said many customers had become inactive due to the recent situation surrounding the bank, resulting in the closure or dormancy of a number of MTDR (Mudaraba Term Deposit Receipt), MSB (Mudaraba Savings Bond), MMPDS (Mudaraba Monthly Profit Deposit Scheme) and MSS (Mudaraba Special Savings (Pension) accounts.

According to the circular, customers whose MTDR, MSB, MMPDS, and MSS accounts were closed between June 1 and June 15 will be allowed to reopen those within the next seven working days upon application.

Once reactivated, the accounts will enjoy all regular operational facilities.

The bank has directed all divisions, zones, and branches to take immediate steps to contact affected customers through mobile phones and other available means and encourage them to resume transactions.

The circular said the initiative aims to increase cash inflows through regular banking channels and ensure uninterrupted customer service.

Branch officials have also been instructed to prepare lists of affected accounts, maintain records of customer communications, and report progress to the head office.

The move comes as the country's largest Shariah-based lender seeks to stabilise its liquidity position following heavy withdrawal pressure in recent weeks.

In just 14 days, Islami Bank has moved from a stable liquidity position into a severe cash crunch following disruptions surrounding the appointment of its new chairman by Bangladesh Bank.

In the face of mounting withdrawal pressure, the central bank on June 14 dissolved the bank's entire board and appointed an administrator. However, much of the liquidity damage had already been done.

To meet the massive deposit withdrawal pressure, the lender sought Tk 10,000 crore in liquidity assistance from Bangladesh Bank last week. In response, the central bank injected a total of Tk 5,000 crore into the bank over two days.