Md. Badrul Millat Ibne Hannan
Bank failures are not new globally, and at times the circumstances become severe enough to necessitate regulatory intervention. This year, Pulaski Savings Bank in Chicago became one such case when the Illinois Department of Financial and Professional Regulation closed the institution.
The last bank failure in the U.S. was the First National Bank of Lindsay, in Lindsay, Oklahoma, in October, 2024. Six months earlier, Pennsylvania state regulators shut down Republic First Bank in Philadelphia.
Most of people seem that the US is richest country of the world. Although US is the largest borrower amongst the world near about 38.0 Trillion USD debts.
AidData, a research lab at William & Mary University in Virginia, has released a new report featuring the most extensive public database yet on China’s overseas lending.
It shows that Chinese government agencies and majority state-owned institutions issued or extended $2.2 trillion in loans and aid to over 200 countries from 2000 to 2023.
Mentionable that the United States emerges as the largest recipient of these funds .The common belief that China’s international financing is focused primarily on developing nations.
The largest bank failure was in U.S. history. Washington Mutual Bank(WaMu) on September 25, 2008 had some $307 billion in assets when it collapsed, equivalent to more than $424 billion and total deposit $260.2 billions.
According to Federal Deposit Insurance Corporation(FDIC) , Pulaski Savings Bank’s failure happened due to impaired capital. The bank had deposit liabilities of at least $20.7 million not accounted for in the core system. Since assets corresponding with these deposits were not recorded, the recording of these deposits exceeded the bank’s equity capital, at which point, the bank became critically undercapitalized. (The FDIC deems a supervised institution “Critically Undercapitalized” if it has a ratio of tangible equity to total assets that is equal to or less than 2.0 percent.)
On the other hand, An Audit revealed by the Office of Inspector General Department of the Treasury that the First National Bank of Lindsay failure was a critical breakdown in the Bank’s internal controls which allowed fraudulent activity to occur that affected a substantial portion of the Bank’s loan portfolio and liquid assets. Deficiencies in the Bank’s Board oversight and internal controls and other unsafe or unsound practices allowed one or more Bank employees to alter Bank records and hide weaknesses in the Bank’s loan portfolio from examiners.
These two examples for the bank failure’s cause and effect. There behinds strong logic. The Common causes of bank failure include the decline in value of a bank's assets below its liabilities ie A bank failure occurs when regulators close a bank because it is unable to meet its financial obligations. This typically happens when the bank becomes insolvent, often as a result of steep declines in the value of its assets or severe liquidity shortages.
It’s a normalcy and practice of banks’ failure around the world. But there are some exceptional example of banks robbery it happened.
In our country,Concerns have been raised about possible government-linked involvement in broad-daylight bank robbery and irregularities.
On April 6, 2017, UK Based The Economist circulated a story titled “Cheques and imbalances: The government initiates a coup at Bangladesh’s biggest bank.” The article described an unusual episode involving Bangladesh’s military intelligence agency.
According to the Economist, on the morning of January 5th, intelligence officers contacted the chairman, vice-chairman, and managing director of Islami Bank Bangladesh, held back them from their homes, and brought them to the agency’s headquarters. There, courteous officers handed the three bankers pre-written resignation letters and requested their signatures — which they provided.
Probably this was the first history of Banking Industries across the world how a bank robbed backed by government.
Most of this siphoned money has taken out from different Banks in the name of fake loans and VAT, Tax and Custom Duty as well. Some time it was forcefully and with the fake documents. It was a daylight robbing. | The Daily Star reported on June 30, 2024 that the NBR accused two firms of the Magnate evading Tk 3,500 crore in taxes.
Many analysts contend that Islami Bank faced orchestrated challenges, driven by a bigwig with assistance from the previous administration.
The glory of this bank started before its foundation in 1983, the Islami Bank Bangladesh PLC (IBBPLC) began its journey with the slogan "Pioneer of Welfare-Oriented Banking." The bank opened the doors of financial services to export-oriented industries and poverty alleviation projects.
United Nation Development Programme (UNDP) reported on August 24, 2017 Islami Bank Bangladesh Limited created the Rural Development Scheme (RDS) to offer Shariah-compliant microfinance to rural Muslims excluded from conventional services. Launched in 1995 in just four villages, RDS has expanded into a nationally recognized poverty-alleviation model serving over 600,000 people. Its growth was enabled by a supportive cultural and policy environment, strong institutional capacity, and committed leadership. The case study highlights key lessons from RDS that can guide South-South learning and inspire similar initiatives in other countries. It also identifies the challenges that continue to restrict the expansion of Islamic microfinance in many Muslim-majority nations.
Currently Islami Bank has been contributing to the development of the rural economy through its rural development scheme, which operates across 34,000 villages in the country.
IBBPLC has received significant international recognition as well. The Banker, a UK-based financial magazine, ranked it among the world’s top 1,000 banks for 12(twelve) consecutive years starting in 2012—a distinction no other Bangladeshi bank has achieved.
At its inception, foreign investors held around 70% of the bank’s capital. However, following an ownership restructuring in 2017, foreign ownership dropped to 32%, according to Prothom Alo. The bank’s earlier shareholder base included 11 Middle Eastern institutions, such as the Islamic Development Bank (IDB), Kuwait Finance House, Dubai Islamic Bank, and the Al-Rajhi Group. In addition, a client of JP Morgan also held shares in IBBPLC.
At present foreign shares are 17.89% and local shares are 82.11% of the bank.
Bangladesh Bank governor acknowledged the reality that Bangladesh Economy can’t go forward sans Islami Bank. One-fourth of the country's population is closely connected with this Bank.
Over the last forty years, Islamic banking in Bangladesh has achieved notable growth and developed a strong foothold in the financial sector. Shariah-compliant banks now hold considerable market shares across key areas: 26% of total deposits, 26% of import financing, 24% of export financing, 39% of remittance handling, 27% of industrial financing, 17% of agricultural investment, and 38% of Cottage, Micro, Small, and Medium Enterprise (CMSME) financing.
The governor hoped Islami Bank will come back as an international bank again, as the financial institution has the potential to be 10 times larger.
Asian Banking & Finance (ABF) reported that Islami Bank stands out with its remarkable contribution of US$12 billion to the nation's reserves since its establishment.
Despite experiencing a sharp deposit run following disclosures of large-scale, conglomerate-linked corruption, Islami Bank has maneuvered to regain stability. In the first nine months of 2025, the bank recorded nearly 15% growth in deposits. With a net inflow of Tk 19,000 crore during this period, it achieved the highest deposit gain among all private commercial banks which stood BDT 1,80,000 crore and maintain its leading position in remittance earnings, with 20% growth this year amounting BDT.72,260 crore.
When all previous attempts collapsed due to strong governance of the Bank and effective initiatives from the Central Bank, a second wave of disruption materialized through employees who had been strategically recruited. Believing themselves indispensable, these individuals—who made up more than half of the Bank’s workforce—assumed that the institution could not survive without them.
However, this second attempt also demonstrated ineffective. The Bank retains a strong, dedicated, self-motivated, and proactive team of employees who truly take ownership of the institution. This team is composed of individuals recruited through competitive examinations and viva assessments from various universities.
Since the end of September 2025, every employee has been working with exceptional commitment and doubled effort to ensure uninterrupted service to the beloved customers.
The support of the general public, expatriate remittance earners, and various media outlets has also played an invaluable role—contributions that remain deeply acknowledged by Islami Bank in every circumstance.
This bank possesses too much prominence to the young educated. Instance, with 150,000 applicants responding to its recent job announcement, the bank has proven its enormous suppliance to masses of educated young candidates.
Islamic banking in Bangladesh has evolved from a modest experiment into a defining pillar of the country’s financial landscape.
People see astonishingly that How Islami Bank Stands Alone Like a Palm Tree, Rising Above in the Storm.
Analyst: Md. Badrul Millat Ibne Hannan, Associate(ASA) CPA Australia , CFC, IFC (Canada).
He can be reached over email: badrul01913@gmail.com
His linkedIn: md-badrul-millat-ibne-hannan-asa-cpa-aust
