The recent governance turmoil at Islami Bank Bangladesh PLC has dealt a significant blow to the country's largest Shariah-based lender, costing it its long-held dominance in remittance collection as state-owned Bangladesh Krishi Bank (BKB) emerged as the top remittance-receiving bank for the first time.

According to Bangladesh Bank data, BKB collected $441.68 million in inward remittances in June, overtaking Islami Bank, whose inflows plunged to $349.29 million from $592.06 million in May—a sharp decline of more than 69 percent, The Financial Express newspaper reported.

The setback follows weeks of unrest triggered by protests over changes to the bank's board. Demonstrations erupted after Bangladesh Bank appointed former deputy governor Md Khurshid Alam as chairman of Islami Bank before later withdrawing the appointment amid mounting opposition. 

The unrest sparked panic withdrawals by depositors, straining the bank's liquidity and disrupting normal operations.

To ease the cash crunch, Bangladesh Bank has so far injected 13,000 crore taka. in emergency liquidity support, according to central bank sources.

Acting Managing Director of IBBL Md Altaf Hossain told The Financial Express that cash-flow disruptions during the protests severely affected the bank's ability to collect remittances. 

He, however, expressed optimism that measures already taken by the bank would help it regain its leading position in July.

BKB Chairman Mohammed Nurul Amin said the state-owned lender would work to sustain its current momentum in remittance mobilisation in the coming months. Agrani Bank ranked third with $325.8 million in remittance inflows during June.

Nationally, remittance inflows fell 22 percent month-on-month to $2.82 billion in June from $3.44 billion in May, largely because Eid-ul-Azha fell in May this year, reducing the usual seasonal inflow in June.

Despite the monthly decline, Bangladesh posted a record $35.59 billion in remittances in fiscal year 2025-26, up more than 17 percent from $30.33 billion a year earlier. 

The record inflows helped lift the country's gross foreign exchange reserves to $37.56 billion at the end of June, while reserves measured under the IMF's methodology stood at $32.90 billion.