United News of Bangladesh

Sammilito Islami Bank PLC is set to begin refunding the principal deposits to its individual account holders starting on September 7. Customers will be allowed to withdraw or encash their entire deposited principal amount at once, though they will not receive any profit on the withdrawn funds. The bank's branches will start accepting applications for these withdrawals from Tuesday. The bank's head office has issued a special circular outlining necessary preparations and guidelines for all divisional heads, zonal heads, and branch managers. The directive was signed by bank's Deputy Managing Director and Chief Coordinator of Operations AF Sabbir Ahmed. While Bangladesh Bank had previously announced the resumption of normal transactions for individual customers starting on September 1, the bank requires a few additional days to finalise preparations. These include sending cash requisitions to branches and sub-branches, ensuring adequate cash supply from the central bank, and establishing a risk-free cash management system. Consequently, the fully-fledged refund process will commence on September 7. According to the directive, customers can withdraw their principal funds from Al-Wadia current accounts, Mudaraba savings accounts, and various term deposits, such as MTDR and DPS. However, depositors who choose to keep their accounts active without withdrawing will continue to receive profits at their pre-determined contractual rates. Once the bank's overall operations fully resume, customers will be able to deposit and withdraw any amount, including profits. To restore lost trust and reassure customers ahead of the payout process, bank authorities have instructed branches to observe September 1 as a special day for rebuilding customer confidence. Officials have been directed to decorate branches and sub-branches, wear formal and decent attire, and welcome customers with flowers or gifts. Priority services must be ensured for senior citizens, women, and persons with disabilities. Branches are required to maintain a clean, positive environment, maximise customer satisfaction, and record video footage of customer service activities. Sammilito Islami Bank was formed during the interim government by merging EXIM Bank, Social Islami Bank, First Security Islami Bank, Global Islami Bank, and Union Bank. The merger took place after these institutions failed to return customer deposits for a prolonged period due to widespread financial irregularities and fraud. The five merged banks hold Tk 1,42,000 crore belonging to approximately 76 lakh depositors, with about Tk 15,000 crore held in individual savings accounts. A staggering 86 percent of the Tk 1,92,000 crore total loans across these banks are currently defaulted, resulting in a capital shortfall of over Tk 1.5 lakh crore. Operating as a state-owned bank since November last year, Sammilito Islami Bank has an authorised capital of Tk 40,000 crore and a paid-up capital of Tk 35,000 crore. The government provided Tk 20,000 crore of the paid-up capital, while shares will be issued to depositors against the remaining Tk 15,000 crore.

Bangladesh Bank Governor Md. Mustaqur Rahman on Tuesday affirmed that the operations of Sammilito Islami Bank, formed through the merger of five Shariah-based banks, will continue as planned. The Governor also sent a stern warning to those involved in the misappropriation of funds from these banks during the tenure of the fallen Awami League government, stating that the government will ensure they face legal punishment. Bangladesh Bank buys $25 million from banks to stabilize market Governor Rahman shared these directives during a meeting with the newly appointed administrators of the five banks and senior officials of the central bank at his office on Tuesday, according to meeting sources. During the meeting, the Governor instructed officials to expedite the appointment of a Managing Director for Sammilito Islami Bank. He confirmed that the current Board of Directors will remain in place to oversee the transition. In a move to stabilize the economy, the Governor emphasized the revival of industrial units under the jurisdiction of these five banks. New Bangladesh Bank Governor outlines vision for investment-led growth "Initiatives must be taken to restart factories that are currently non-functional. We must ensure these units return to production," he reportedly said, adding that the central bank would assist in clearing any outstanding foreign dues of these institutions to facilitate operations. Officials present at the meeting noted that the Governor’s clear stance has dispelled the prevailing confusion and rumors regarding the future of the merger. This follows a similar message delivered by the Governor on Sunday during a meeting with representatives from the Association of Bankers, Bangladesh (ABB). In that meeting, he asserted that ongoing reforms in the banking sector would continue unabated and that he would not succumb to any political pressure. Furthermore, in alignment with the current government’s electoral pledge to create 10 million jobs within the first 18 months, the Governor pledged policy support to revive factories that were shut down due to recent political shifts. Following the fall of the Awami League government, the interim administration merged five struggling banks—EXIM, Social Islami, First Security Islami, Union, and Global Islami Bank—to form Sammilito Islami Bank. The new entity began its journey with a total capital of Tk 35,000 crore. Of this, the government provided Tk 20,000 crore, while the remaining Tk 15,000 crore will be sourced from a dedicated fund for depositors. Additionally, an initiative is underway to pay out Tk 12,000 crore from the Deposit Insurance Fund to approximately 78 lakh depositors, with each receiving up to Tk 2 lakh.