Foreign partners compelled Islami Bank to usher in changes: Muhith

The sudden changes at Islami Bank Bangladesh were made due to mounting pressure from the lender's foreign partners, Finance Minister AMA Muhith said yesterday.

“Many changes came as a consequence of the pressures from the foreign partners,” he told reporters at his secretariat office.

His comments came two days after the country's largest bank brought wholesale changes to its management, including appointment of former secretary Arastoo Khan as its chairman.

Muhith said Jeddah-based Islamic Development Bank, which has stakes in IBBL, had considered retreating from the venture altogether but later changed its mind.

For the last two years, the bank has been under surveillance, Muhith said.

Questions were raised in the past about how the bank's profit is used. “Where does its profit go ultimately? How is it used? There were questions about this.”

Muhith said he does not think the sudden changes will significantly affect the health of the bank.  

But he declined to make any comment on why the changes were made.

“I cannot comment on the recent changes. I have to watch and I will talk to the new management shortly.”

About the changes, Muhith said: “It looks good.”

The finance minister went on to praise Islami Bank, saying the lender is the country's No. 1 bank in terms of business at the moment. The expansion of the bank is down to the good services it provides its clients. 

One of the reporters also asked whether a local business group is taking control of the bank, and whether it would be good for the government's efforts to establish governance in the banking sector if that happens.

Muhith replied with a bit of surprise. “Is any group taking control of the bank? I don't know. I cannot say which groups are involved.”