Orders to complete merger of Sammilita Islami Bank quickly

Bangladesh Bank Governor Md Mostaqur Rahman has instructed the administrators to expedite and complete the merger process of Sammilit Islami Bank as quickly as possible.

He put emphasiz that there is no alternative to swift completion as part of the broader banking sector reforms. 

This directive came during a meeting he held at the Governor's Office on Monday with the administrators appointed to the five merged Sharia-based banks—Exim Bank, Social Islami Bank, First Security Islami Bank, Global Islami Bank, and Union Bank—along with their associates and various central bank officials.

In the meeting, the governor specifically inquired about the delays in IT integration for the newly formed bank. 

The officials explained that additional time was required to consolidate the diverse data from the different banks. 

Some participants raised concerns about circulating rumours questioning whether the merger would proceed. 

In response, Governor Rahman firmly stated that the government has already injected Tk 20,000 crore in capital into the new bank, while Tk 12,000 crore is being provided to depositors from the Deposit Insurance Fund. 

He made it clear that the entire process must move forward without delay and that there is no possibility of reversing the merger.

This follows an earlier meeting on March 3, where the governor had assured the administrators that the appointment of a Managing Director for Sammilit Islami Bank would be finalised soon. 

He urged them to operate strictly according to regulations, intensify loan recovery efforts by all possible means, and take steps to restart any closed factories linked to investments from the original five banks.

The five troubled banks were merged into Sammilit Islami Bank PLC after prolonged failures to repay depositors, with Bangladesh Bank officially appointing administrators in November last year to oversee the full integration, including IT systems. 

Each bank received one administrator and four supporting officers, all drawn from Bangladesh Bank staff at various levels. 

Exim Bank had previously been under the control of Nazrul Islam Majumder of the Nasa Group, while the other four were linked to S Alam Group. 

Since the merger began, former owners have attempted to stir various controversies.

The new bank launched with a total capital of Tk 35,000 crore, of which Tk 20,000 crore came from the government and the remaining Tk 15,000 crore is allocated for depositor support. 

It serves around 7.5 million depositors holding approximately Tk 1,42,000 crore in deposits, against outstanding loans of Tk 1,92,000 crore, of which 77 percent are defaulted.

Although depositors faced long delays in accessing their funds, the central bank arranged for withdrawals of up to Tk 2 lakh starting January 1 under a special scheme from the Deposit Insurance Trust Fund, announced on December 30. 

This arrangement has continued unchanged despite the change in governor. Those with deposits exceeding Tk 2 lakh can withdraw up to Tk 7 lakh in installments of Tk 1 lakh every three months after the initial amount.