Around a hundred protesters claiming to be depositors of five troubled Islamic banks staged a demonstration outside Bangladesh Bank on Thursday, demanding full repayment of their deposits with profit and rejecting “haircut” on returns.
The protesters gathered in the morning in front of the central bank’s main gate and chanted slogans against the decision to limit returns on deposits.
Tension escalated when some demonstrators attempted to approach the central bank premises and later blocked the road at Shapla Chattar, prompting law enforcement personnel to disperse them using water cannons.
The protesters said they represent depositors of five Shariah-based banks that are being consolidated under a new entity named Sammilito Islami Bank. The banks involved in the consolidation are Union Bank, First Security Islami Bank, Global Islami Bank, Social Islami Bank and EXIM Bank.
According to the protesters, depositors of these banks have been staging programmes for months over the central bank’s decision to limit profit payments on deposits for 2024 and 2025 to 4 per cent. The reduced return has widely been described as a “haircut” under the restructuring framework.
Under a previously announced programme, the protesters formed a human chain and began their sit-in outside Bangladesh Bank around 11am. At about 12:30pm, a group attempted to enter the central bank premises to submit a memorandum to the governor, but security personnel blocked them at the gate and later closed the entrance when some protesters tried to force their way in.
Using handheld loudspeakers, protesters appealed to authorities to allow them inside the central bank, declaring that they would not leave without meeting the governor. Police later intervened and asked them to move away from the gate. The protesters briefly dispersed but soon regrouped and again gathered in front of the entrance.
Speakers at the programme alleged that the decision to provide only 4 per cent profit on deposits for the past two years was “inhumane and unjust.” They said many depositors had been unable to withdraw their principal and expected profit from the banks, leaving them in financial distress.
The protesters demanded cancellation of the haircut decision and full payment of deposits with profit, along with restoration of normal banking transactions. They also warned that if their demands were not met, they would stage a siege programme at Bangladesh Bank on March 12.
Alif Reza, convener of the protest movement, said depositors were demanding full returns on their savings.
“Now they are offering only 4 per cent profit after cancelling the haircut. We want the full profit. All our money must be returned quickly,” he said, adding that protesters were not allowed to submit a memorandum to the governor.
Another depositor, Zainal Abedin, said he had a fixed deposit worth Tk1 crore in one of the banks.
“They want to give me only Tk4 lakh profit. I cannot accept that. They are taking salaries and bonuses, but depositors are suffering,” he said.
The five private Shariah-based banks were brought under a consolidation framework last year amid severe liquidity stress, leading to the formation of the state-backed Sammilito Islami Bank as part of a restructuring effort.
Initially, the central bank announced that no profit would be paid on deposits for the previous two financial years under a haircut arrangement. The decision was later revised following protests by depositors, allowing a 4 per cent return instead.
Responding to the protest, Bangladesh Bank spokesperson Arief Hossain Khan said the concerns of depositors were understandable but warned that the merged bank faces a severe liquidity shortage.
“Their movement is understandable. But the reality is that Sammilito Islami Bank has a liquidity crisis,” he told TIMES.
“If all the money is paid immediately, the bank will not be able to recover. Paying everyone would require about Tk1.5 lakh crore, while the bank has only around Tk35,000 crore in capital.”
Khan urged depositors to remain patient, saying the government had already taken responsibility for stabilising the bank.
“We would request them to show patience. The government has taken responsibility for the bank, and depositors will get their money back,” he said.
He added that the demand for higher profit payments was currently under review.
“The relevant departments of Bangladesh Bank are examining the issue. We will see what recommendation comes from that review,” Khan said.
