Written by The Banking Post
Bangladesh Bank has finalised a resolution scheme to merge five financially troubled Shariah-based banks into a single entity, to be named Sammilito Islami Bank PLC, marking a major regulatory move to stabilise the Islamic banking sector.
Under the plan, Sammilito Islami Bank will absorb First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank and EXIM Bank. The central bank released the detailed merger framework on Tuesday, outlining a new capital structure and a phased approach to depositor repayment.
The authorised capital of the new bank has been set at Tk 40,000 crore, with paid-up capital of Tk 35,000 crore. Shareholding will be divided into three classes. The government will hold the largest stake as a Class A shareholder after injecting Tk 20,000 crore as capital.
Institutional depositors will also become shareholders. Fixed deposits worth Tk 7,500 crore from banks and financial institutions within the five merging banks will be converted into Class B shares. Another Tk 7,500 crore from fixed deposits of other non-bank institutional depositors will be converted into Class C shares.
However, the central bank has exempted several entities from mandatory deposit-to-share conversion. These include educational and religious institutions, hospitals, provident and gratuity funds, joint ventures, multinational companies and foreign embassies.
To protect general depositors, Bangladesh Bank has introduced a set of safeguards. Deposits of up to Tk 2.0 lakh will remain fully protected under the Deposit Insurance Act and can be withdrawn at any time. For balances above that threshold, withdrawals from current and savings accounts will be allowed in instalments over a 24-month period.
The regulator has also allowed humanitarian exceptions. Depositors suffering from critical illnesses, such as cancer patients or those requiring kidney dialysis, will be permitted to withdraw funds beyond the prescribed limits to meet medical expenses.
Along with issuing the notification, Bangladesh Bank unveiled the logo of Sammilito Islami Bank. The merger is seen as a decisive step by the regulator to restore confidence and strengthen governance in the country’s Islamic banking system.
