Written by The Banking Post
The government has finalised the memorandum and articles of association for the proposed “Sammilito Islami Bank,” which will be formed by merging five shariah-based commercial banks facing severe liquidity crises, officials said.
Under the two foundational legal documents recently approved by the Financial Division of the Ministry of Finance, the shares of the proposed bank will initially be distributed among the subscribers of the memorandum and articles of association.
According to an official notification, a seven-member board of directors will be formed, headed by the finance secretary. Of the 20 billion shares, six directors will hold one share each, while the finance secretary will hold the remaining shares of the state-owned unconventional bank.
Under Article 64, a director qualifies if they hold at least one unencumbered share worth Tk 10 in their own name. Directors representing interests holding the requisite shares will not be required to hold a qualification share personally.
Citing Article 5, the documents state: “At no time shall the total capital of the bank be less than 10 per cent of risk-weighted assets, or as may be prescribed by Bangladesh Bank (BB) from time to time.”
The Bangladesh Bank (BB) is expected to provide full details about the proposed bank on Wednesday.
A BB official, speaking on condition of anonymity, said a press meet will be held at the BB headquarters, with the governor, deputy governors, and senior officials of the bank resolution department in attendance.
The central bank has allotted a 2,336-square-foot office on the 17th floor of Sena Kalyan Bhaban in Motijheel to oversee the merger process. From this office, the five banks will be amalgamated to form the country’s first full-fledged government-owned unconventional bank.
According to the BB merger roadmap, the proposed bank will have a paid-up capital of Tk 350 billion, with Tk 200 billion provided by the government as equity and the remaining Tk 150 billion coming from the deposit-insurance trust fund and institutional deposits.
The combined non-performing loans (NPLs) of the five banks amount to Tk 1.47 trillion, accounting for 77 per cent of their total loan disbursements. Union Bank has the highest percentage of dud loans at 98 per cent, followed by First Security Islami Bank (96 per cent), Global Islami Bank (95 per cent), Social Islami Bank (62 per cent), and EXIM Bank (48 per cent).
