Bangladesh Bank has finalised the scheme to merge five troubled Shariah-based banks into a single entity named ‘Sammilito Islami Bank PLC’.
This newly formed bank will acquire First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, and EXIM Bank.
The central bank released the detailed resolution scheme on Tuesday, outlining a unique capital structure and a plan for depositor repayment.
The policy sets the authorized capital of the new bank at Tk40,000 crore, with a paid-up capital of Tk35,000 crore. The capital will be divided into three classes of shareholders:
Class A Shareholders: The government has provided Tk20,000 crore as capital, making it the primary shareholder.
Class B Shareholders: Tk7,500 crore from the fixed deposits of institutional depositors (banks and financial institutions) within the five merging banks will be converted into shares.
Class C Shareholders: Another Tk7,500 crore from the fixed deposits of other non-bank institutional depositors will also be converted into shares.
However, certain entities are exempt from this mandatory share conversion. These include educational and religious institutions, hospitals, provident and gratuity funds, joint ventures, multinational companies, and foreign embassies.
Protection for Individual Depositors: Bangladesh Bank has introduced specific measures to protect the interests of general depositors-
Full Protection: Deposits up to Tk2.0 lakh are fully secured under the ‘Deposit Insurance Act’ and can be withdrawn at any time.
Installment Withdrawals: For deposits exceeding Tk2.0 lakh, withdrawals from current and savings accounts will be allowed in installments over a period of 24 months.
Humanitarian Exception: In a compassionate move, patients suffering from critical illnesses like cancer or those requiring kidney dialysis will be allowed to withdraw funds beyond the stipulated limits to cover medical expenses.
The central bank also unveiled the logo of the newly formed "Sammilito Islami Bank" alongside the issuance of this notification. This merger marks a significant step by the regulator to stabilize the Islamic banking sector in Bangladesh.