Islami Bank’s Real Challenge Isn’t Liquidity, It’s Rebuilding Trust

There is an old truth in banking: banks do not collapse when they run out of money; they collapse when they run out of trust. The withdrawal of more than Tk 3,500 crore from Islami Bank Bangladesh PLC, the country’s largest Shariah-based bank, within just five working days has once again brought that reality into focus. This is not merely a statistic about money leaving a bank. It is a signal about depositor confidence, the acceptance of leadership, and public trust in the banking system itself. Following the appointment of the new chairman, Md. Khurshid Alam, protests, demonstrations, and controversy surrounding the bank’s management began almost immediately. Protesters have been carrying out continuous programmes demanding the cancellation of his appointment. The situation escalated to such an extent that the chairman’s first board meeting was held online rather than in person. Then came another kind of vote, a silent vote. This vote was not cast in ballot boxes, but at bank counters. Without joining protest marches, customers began expressing their position by withdrawing their money. Approximately Tk 2,570 crore was withdrawn within four working days, followed by nearly Tk 1,000 crore more in a single day. The total amount withdrawn surpassed Tk 3,500 crore. Banking experts often say that when a depositor places money in a bank, they are depositing not only funds but also trust. And when that trust begins to crack, people instinctively seek to move their savings to what they perceive as a safer place. That psychology appears evident in the current developments surrounding Islami Bank. Neither Bangladesh Bank nor the bank’s management has so far expressed concern about the institution’s financial capacity. On the contrary, the central bank has stated that it is closely monitoring the situation and will provide liquidity support if necessary. In other words, the issue at present is not a shortage of money, but a shortage of confidence. What makes the situation even more significant is that Islami Bank had been experiencing strong deposit growth over the past year. Following the restructuring of its board, the bank’s total deposits reached approximately Tk 1.83 trillion in 2025. More than Tk 22,000 crore in new deposits were added within a single year. In other words, the same bank that had been attracting fresh deposits is now witnessing customers rapidly moving their money elsewhere. For that reason, viewing the withdrawal of Tk 3,500 crore merely as a financial event would be a mistake. This is, in reality, a confidence test. Do people trust the bank’s leadership? Do they believe their savings are secure? Do they have confidence that future decisions will be transparent? The answers to these questions will ultimately determine Islami Bank’s path forward. History shows that long queues at banks often begin with rumours. But when those rumours combine with a crisis of confidence, they can quickly evolve into the risk of a bank run. Although regulators and bank officials are reluctant to describe the current situation in those terms, the withdrawal of thousands of crores of taka within a matter of days has sent a powerful message to the market. In the end, one question remains .What is the bigger challenge facing Islami Bank today — a liquidity crisis, or the task of rebuilding trust? Because in the world of banking, lost money can often be recovered. But once trust is lost, rebuilding it can take years.

The Rise of Corporate Capital in Bangladesh’s Pharmacy Sector: Healthcare Modernization or a Threat to Small Businesses?

A quiet but significant transformation is underway in Bangladesh’s pharmacy sector. For decades, the industry has largely been dominated by small and medium-sized entrepreneurs. However, in recent years, large corporate groups have begun entering the market at an increasingly rapid pace. While some view this shift as a long-overdue modernization of healthcare services, others see it as the beginning of a new challenge for thousands of small business owners. According to market research firm IQVIA, Bangladesh’s pharmaceutical market is now valued at approximately Tk 32,000 crore, making it one of the country’s largest and fastest-growing sectors. The size and potential of this market have attracted the attention of major business conglomerates seeking to establish a foothold in pharmaceutical retail. One of the most notable examples is AKIJ Pharmacy, a venture of the Akij Group. The company has already launched outlets across the country and announced ambitious expansion plans for the coming years. According to reports, the company aims to invest around Tk 2,000 crore to build thousands of pharmacy outlets nationwide. AKS Pharmacy is also expanding rapidly. The company already operates more than 60 outlets and has successfully attracted foreign investment. Meanwhile, BRAC Healthcare has adopted a different model by integrating primary healthcare services, diagnostics, and pharmacy operations under a single platform. Adding to the competition, international pharmacy chain Aster Pharmacy has entered the Bangladeshi market. As a result, the country’s pharmacy industry is no longer facing competition solely from domestic players; it is increasingly becoming part of a broader global retail healthcare landscape. The aggressive expansion of corporate pharmacy chains is driven by significant financial strength. Large corporations possess substantial capital, advanced technology, efficient supply chain systems, skilled human resources, and extensive marketing capabilities. They can open hundreds of outlets simultaneously, operate with lower profit margins for extended periods, and continue investing heavily to strengthen their market position. In contrast, most local pharmacies operate with limited financial resources. In many cases, a single entrepreneur or family serves as the backbone of the business. Their ability to maintain large inventories, implement advanced software systems, hire registered pharmacists, or invest heavily in branding and promotion is often limited. As a result, competing directly with corporate chains may become increasingly difficult. However, the rise of corporate pharmacies is not driven solely by business ambitions. It is also linked to long-standing challenges within Bangladesh’s healthcare system. For years, concerns have existed regarding the shortage of registered pharmacists, inadequate medicine storage facilities, poor temperature control, and the circulation of counterfeit or substandard medicines. Corporate pharmacy chains have positioned themselves as a solution to these issues, promoting a model based on professional standards and quality assurance. Their marketing focuses on registered pharmacists, digital prescription records, cold-chain maintenance, direct procurement from pharmaceutical manufacturers, and strict quality control measures. In essence, they are not merely selling medicines; they are selling a new concept of organized, technology-driven pharmaceutical retail. This is where small businesses face their greatest challenge. The competition is no longer based solely on capital; it is increasingly a battle for consumer trust. If customers begin to perceive corporate pharmacy chains as the only reliable source of safe and authentic medicines, local pharmacies may gradually lose market share regardless of their long-standing presence in the community. Experiences from other countries suggest a similar pattern. Large pharmacy chains often attract customers through modern facilities, longer operating hours, digital services, and occasionally lower prices. While consumers may benefit in the short term, smaller independent pharmacies frequently struggle to survive. Over time, this can lead to market concentration, where a significant portion of the industry becomes controlled by a handful of dominant players. The same question is now emerging in Bangladesh. If major urban pharmacy markets eventually come under the control of a few corporate chains, what will happen to small entrepreneurs who have spent years building their businesses through personal savings, hard work, and local relationships? Will they be able to compete on equal terms? Employment is another important consideration. Thousands of small pharmacies across the country support a vast number of livelihoods directly and indirectly. Corporate expansion may create new jobs, but it could also generate uncertainty for many small business owners and employees. As economic power becomes concentrated in fewer hands, concerns about market balance and fair competition may intensify. Yet the story is not entirely one-sided. In rural and semi-urban Bangladesh, personal relationships, trust, and community-based service continue to play a vital role. Local pharmacies often provide medicines on credit, offer home delivery during emergencies, and maintain strong relationships with customers built over many years. This form of social capital cannot be easily replicated by corporate organizations. Ultimately, the central question facing Bangladesh’s pharmacy sector is not simply one of corporate versus small business. Rather, it is about how the country can ensure safe, modern, and high-quality healthcare services while preserving a fair and competitive environment for local entrepreneurs. The answer to that question will shape the future of the industry in the years ahead. Whether Bangladesh’s pharmacy sector evolves into a more efficient healthcare ecosystem or moves toward greater market concentration remains to be seen.