Sammilito Islami Bank has launched around 10,000 cases against defaulting borrowers in a sweeping drive to recover funds trapped in bad loans at the five troubled Islamic banks merged into the state-owned lender.
More cases are being prepared as the bank steps up legal action while simultaneously pursuing negotiated settlements through the Exit Policy and Alternative Dispute Resolution (ADR) to accelerate recovery.
Bangladesh Bank disclosed the scale of the recovery drive on Thursday following a meeting at its headquarters to review loan recovery and the restructuring and integration of the five merged banks.
The meeting, attended by the Bangladesh Bank Governor Md Mostaqur Rahman and officials of the Bank Resolution Department (BRD), reviewed the progress of the cases and measures being taken to bring the stuck funds back into productive use.
The BRD is regularly monitoring the recovery drive and following up on the cases, alongside the broader restructuring of Sammilito Islami Bank.
The authorities are also moving to identify those responsible for irregularities, corruption, loan fraud and misuse of assets under the previous ownership and management of the five banks. A forensic audit undertaken for this purpose is now in its final stage.
Bangladesh Bank expects the combination of court cases, the Exit Policy and ADR to accelerate recovery from defaulting borrowers and strengthen the financial position of the merged bank.
The central bank is simultaneously pushing ahead with the operational integration of the five lenders. Sammilito Islami Bank’s board has been reconstituted with greater representation of independent directors, while its chief executive officer took office on 16 July.
Organisational adjustments involving around 16,000 officers and employees have also been completed.
Work is under way to integrate the five banks’ Core Banking Systems, SWIFT and Relationship Management Application (RMA) infrastructure under a single framework. A common interface has already been established, allowing depositors to withdraw money from any branch of the five banks.
The merger and rationalisation of 780 branches and around 1,500 business units are also under way, based on their locations, business potential, customer service requirements and operating costs.
Bangladesh Bank said it is closely monitoring loan recovery, case disposal, governance, human resources, branch rationalisation and technological integration.
Sammilito Islami Bank began operations with Tk20,000 crore in paid-up capital after the merger of EXIM Bank, First Security Islami Bank, Global Islami Bank, Social Islami Bank and Union Bank.
The central bank said the restructuring is aimed at protecting depositors, strengthening governance and recovering funds locked in defaulted loans.
