Dhaka: Islami Bank Bangladesh, the country’s largest private lender, has become the focus of a political confrontation between the Bangladesh National Party-led (BNP-led) government and opposition Jamaat-e-Islami over its future control, with protests erupting over a possible comeback by the controversial S Alam Group and the ruling party alleging that the agitation is being orchestrated by the Islamist party.For more than a week, protesters associated with Jamaat-e-Islami have staged demonstrations demanding the removal of several board members, alleging that they are linked to the S. Alam Group, the conglomerate that acquired control of the bank in 2017 and has faced accusations of siphoning billions of taka from the lender.The dispute spilled into parliament on June 9, where lawmakers from the ruling BNP and opposition Jamaat-e-Islami clashed over the bank’s ownership, management and political affiliations.The debate was triggered by a notice submitted under Rule 68 of the Rules of Procedure by opposition leader and Jamaat chief Shafiqur Rahman, who called for Islami Bank’s shares to be returned to what he described as their rightful owners.The bank experienced panic withdrawal after protests started due to the loss of confidence of depositors.According to a senior bank official, customers have withdrawn over Tk 40 billion in just a week making the bank unable to maintain mandatory cash reserve ratio (CRR) with the central bank exposing further risks for existing depositors.Founded in 1983, Islami Bank had long been associated with individuals and institutions linked to Jamaat-e-Islami. That changed nine years ago when the Chittagong-based S. Alam Group, whose rise was widely linked to the government of former Prime Minister Sheikh Hasina, gained control of the lender.Following Hasina’s removal from power, Bangladesh Bank seized an estimated 82% stake linked to the S. Alam Group and reconstituted the board with independent directors. However, the ownership of those shares remains unresolved.During the parliamentary debate, opposition lawmakers urged Prime Minister Tarique Rahman to intervene and “save” the bank, while treasury bench members alleged links between the protesters and those seeking parliamentary intervention.Opening the discussion, Bangladesh home minister Salahuddin Ahmed alleged that Islami Bank had been used to support political mobilisation and electioneering.He rejected suggestions that criticism of the bank amounted to an attack on Islam, a reference to the lender’s long-standing association with individuals and organisations linked to Jamaat.“Now it is being said that Jamaat-e-Islami is not the owner of the bank. At the same time, they say, ‘Do not touch Islam’,” he said.Arguing that neither the bank nor its management should be conflated with religion, he added, “The Islami Bank is not Islam … the Jamaat-e-Islami is not Islam.”In remarks that appeared to refer to the bank’s historical association with Jamaat-linked interests, Salahuddin said the existing concentration of influence over the lender would not continue indefinitely.“That control will eventually end. We understand this pain,” he said.The minister argued that roughly 81% of the bank’s shareholding appeared to be concentrated within a single group and said ownership should ultimately be returned to what he called genuine shareholders.“Around 81% of current shareholding appeared concentrated within one group. Measures will be taken to return ownership to the genuine shareholders. Let the percentage of shareholding be published,” he said.Salahuddin also accused Islami Bank’s Rural Development Scheme (RDS), a flagship micro-finance programme, of being used for political mobilisation.He alleged that Tk 22,000 crore ($1.79 billion) had been distributed through the scheme, including Tk 11,000 crore ($895.9 million) after the August 2024 political transition to interim government, “to help a certain group cross the election river”.The minister further alleged that after the bank was “seized”, 9,000 employees were unlawfully dismissed and replaced with 6,000 politically aligned recruits. He also called for investigations into allegations of large-scale money laundering involving the S Alam Group and others.Responding to the allegations, Rahman challenged Salahuddin to provide evidence linking Jamaat-e-Islami to election financing.“I want to know clearly whether the minister meant Jamaat by this. If he did, I am taking this absolute challenge. If he can prove it, I will personally award him a medal,” he said.Rejecting allegations surrounding the RDS, the opposition leader added, “Who took it? Me? My colleagues? If even a single taka went into party funds, I say, searchlights should be used ….”Rahman also alleged that shareholders had faced intense pressure from a state agency and had been compelled to transfer their shares.He further claimed that thousands of employees had been recruited without proper procedures or public advertisements.Calling the practices “a hallmark of fascist times,” Rahman said that after the August 2024 political transition, those recruited under the previous arrangement had been invited to sit examinations to regularise their positions, but none had appeared.He accused Hasina of destroying Islami Bank through the S. Alam Group and warned that the conglomerate was now being allowed to return.In his concluding remarks, Finance Minister Amir Khosru Mahmud Chowdhury suggested the controversy extended beyond banking issues and accused unnamed actors of attempting to create instability.“It seems to me the entire matter is being used to create political instability. This is not limited to Islami Bank. There is a connection between those withdrawing money, those creating disorder inside and outside the bank, and those who brought the proposal in parliament,” he said.In a remark likely to intensify the controversy, the finance minister added, “You can rest assured that Islami Bank’s future is very safe in the BNP’s hands. Absolutely safe.”Bangladesh Bank has remained in effective control of the lender since the political transition, though the legal status of the seized S. Alam-linked shares is yet to be resolved by the courts.Under former central bank governor Ahsan H. Mansur, regulators had planned to sell the stakes of S. Alam and bring in new investors. However, the process has largely stalled since Mostaqur Rahman took over as governor in February 2026 under the elected government.The uncertainty has coincided with a sharp deterioration in the bank’s financial position. Once the country’s most profitable private lender, Islami Bank reported a loss of Tk 288 crore ($23.5 million) in the January-March quarter of 2026.Its classified loans rose to 42.36% at the end of 2024 from 4.32% a year earlier, according to its annual report.At the end of 2025, the bank held deposits of Tk 1.82 trillion and investments of Tk 1.86 trillion, equivalent to approximately $14.7 billion and $15.1 billion respectively.