The merger of five struggling Shariah-based banks into Sammilito Islami Bank PLC has yet to ease the financial strain on thousands of depositors, with a severe cash fund crisis persisting across branches.
The consolidation, which combined Exim Bank, First Security Islami Bank, Global Islami Bank, Social Islami Bank, and Union Bank, was launched amid high public expectations. Yet depositors continue to struggle to access their savings, highlighting an ongoing liquidity crunch.
Shobnam Begum, a retired Social Welfare Directorate officer, told UNB that she has been unable to withdraw her pension from Exim Bank’s Moghbazar branch for three months.
“Despite repeated assurances from the branch manager, I was turned away again this week,” she said, underscoring the growing hardship faced by ordinary account holders.
Another depositor at Social Islami Bank’s Panthapath branch described the ordeal as “an unprecedented example of bank looting,” after having to lobby persistently to access his own funds.
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Branches of the merged banks now operate in near silence, with many customers stopping visits altogether. Observers noted that at the Nayapaltan branch of Global Islami Bank, the only visitors were DPS depositors, reflecting a sharp drop in public trust.
Government Funds Unclear
Confusion surrounds the Tk 20,000 crore in government capital earmarked for the new bank. While some officials suggested the funds had been released, a First Security Islami Bank branch manager said they had yet to arrive at branch level. “We cannot process withdrawals without written instructions from the top,” the official said.
Bangladesh Bank Executive Director Arif Hossain Khan added that no government money has officially been disbursed for core capital formation.
He cautioned that while initial assistance was promised, there is no certainty about the timing.
Employee Uncertainty Looms
The merger impacts more than 18,000 employees, whose annual salary and benefits total nearly Tk 2,000 crore.
Currently private bank staff, these employees will transition into a government-owned institution. Questions remain over pay structure, benefits, and long-term job security, particularly given plans to privatize the bank within five years.
Capital Structure and Priorities
Sammilito Islami Bank PLC is expected to have an approved capital of Tk 40,000 crore, with Tk 35,000 crore paid-up. The government will contribute Tk 20,000 crore—half in cash, half via Sukuk bonds—while Tk 15,000 crore will be sourced from institutional depositors’ funds converted into shares through a bail-in process.
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Authorities have stressed that small depositors will be prioritised for repayments, with larger depositors’ funds released in phases.
Dr. Mohammad Ayub Mia, Chairman of the new bank, said restoring depositor confidence is the top priority. “The establishment of a government-owned Islamic bank sends a positive signal for the country,” he said, noting that technical teams are working to finalize the bank’s operational framework.