Depositors of Shariah based five crisis-ridden banks undergoing a merger will not receive any profits on their deposits for the years 2024 and 2025.
Following international practices, Bangladesh Bank has decided to apply a "haircut" to two years of profits to stabilize the financial health of the institutions.
The decision was communicated by the central bank via letters sent to the administrators of the five banks on Wednesday. Bangladesh Bank has directed a recalculation of all deposit accounts, effectively removing any profits credited over the last two years and redefining the final balance of each account.
The five banks involved in the merger are First Security Islami Bank, Global Islami Bank, Union Bank, Exim Bank, and Social Islami Bank.
These entities are being merged to form a single new entity named "Sammilito Islamic Bank PLC"
According to central bank officials, all five banks incurred massive losses during 2024 and 2025. Consequently, the banks are unable to distribute profits to depositors.
Currently, these banks hold deposits with promised profit rates ranging from 7 percent to 9 percent. Under the new directive, any profit added to accounts during this period will be deducted, resulting in a reduction of the total deposit balance for account holders.
Data from Bangladesh Bank reveals:
Total Depositors: Approximately 7.5 million.
Total Deposits: Approximately Tk 142,000 crore.
Total Outstanding Loans: Approximately Tk 193,000 crore, a significant portion of which is classified as defaulted.
The central bank’s letter states that to ensure the balanced implementation of the ‘Resolution Scheme’, all deposit accounts must be recalculated based on their status as of December 28, 2025. No interest or profit can be calculated for the period from January 1, 2024, to December 28, 2025.
"The final balance must be determined by applying the prescribed haircut, and the process must be completed swiftly," the directive noted.
This decision means that in addition to losing two years of earnings, depositors will see a physical decrease in their account balances. This follows a previous move where the share value of these five banks was declared ‘zero’, causing sponsors and investors to lose their entire investments.
Previously, Exim Bank was under the control of Nazrul Islam Mazumder, former chairman of the Bangladesh Association of Banks (BAB). The other four banks were controlled by Saiful Alam, head of the S. Alam Group. Both individuals were known as close associates of the ousted Prime Minister Sheikh Hasina and allegedly held significant shares and took the bulk of the loan facilities through various names.