Bangladesh’s banking rescue programme has yet to ease depositors’ struggles despite Tk51,000 crore in emergency liquidity support, regulatory intervention and an ongoing restructuring drive, with millions of customers still unable to freely access their savings.
The rescue effort has failed to restore confidence, raising questions over how the emergency funds were managed. This week, Finance Minister Amir Khosru Mahmud Chowdhury told parliament that depositors of troubled banks would recover both their principal and accrued interest, offering the government’s strongest assurance yet.
Bangladesh Bank released liquidity support in phases to stabilise troubled lenders. However, banking officials and industry participants familiar with the matter said the funds were disbursed without adequate safeguards, allowing treasury divisions at some recipient banks to misuse part of the liquidity instead of easing depositor withdrawals.
Banking experts said closer regulatory oversight of treasury operations could have ensured the funds were used as intended and prevented the crisis from deepening.
Customers of First Security Islami Bank (FSIB), Social Islami Bank (SIBL), Global Islami Bank, Union Bank, EXIM Bank and National Bank continue to face withdrawal limits, payment delays and persistent disruptions to normal banking services despite repeated rescue efforts.
Md Ezazul Islam, director general of the Bangladesh Institute of Bank Management (BIBM), said emergency liquidity alone cannot resolve the crisis while public confidence remains weak.
Panic-driven withdrawals, compounded by politically motivated campaigns, have prolonged pressure on troubled banks despite regulatory support, he said.
He said the affected banks could take another three to four years to recover through legal reforms, stronger governance and continued liquidity support.
BRAC Bank Vice-Chairman Faruq Mayeenuddin said Bangladesh Bank should have attached stricter conditions to its liquidity support.
He said withdrawals of up to Tk50,000 should have been guaranteed for small depositors, ensuring influential customers could not withdraw large sums ahead of ordinary account holders.
“Emergency liquidity alone cannot keep troubled banks afloat indefinitely,” he told TIMES of Bangladesh. “Ultimately, they must regain the confidence of depositors and stand on their own funding base and business strength.”
For many customers, however, the crisis has become deeply personal.
Jamal Hossain, a migrant worker from Lakshmipur, returned home about two years ago after working overseas, with plans to start a business using nearly Tk38 lakh saved in a Social Islami Bank agent banking account.
When he tried to withdraw the money, he was told the outlet had no cash and was advised to visit a larger branch, where his family was informed that he could withdraw only Tk5,000 a day.
Unable to access his savings, he returned overseas for work.
“I am still waiting to see what decision the government takes regarding our money,” he said. “I genuinely worry whether I will ever recover my hard-earned savings.”
Arif Hossain faces a similar ordeal at First Security Islami Bank, where around Tk60 lakh deposited mostly in 2023 and 2024 across savings, current and fixed deposit accounts remains locked.
He said repeated requests to withdraw money for medical treatment were rejected because of restrictions, while even the profit payments promised every two months could not be verified.
Bangladesh Bank’s Asset Quality Review (AQR) underscores the scale of the challenge. The five Islamic banks under restructuring have severe capital shortages, massive provisioning deficits, high classified loans and combined liabilities of around Tk1.97 lakh crore.
For many depositors, however, the promised reforms remain invisible.
Garment worker Abdur Rashid has spent months trying to recover Tk7.92 lakh deposited at EXIM Bank’s Jessore branch.
“Every time they tell me to wait a little longer. But I still haven’t received a single taka,” he said.
Mahmodul Hasan Tareq said his father’s lifetime savings remain locked in Union Bank, while he keeps his own account with First Security Islami Bank. His diabetic mother depends on the money for treatment, yet withdrawals remain capped at Tk10,000-20,000, forcing repeated trips to bank branches.
Even when balances appear intact, access remains out of reach. Tareq shared a screenshot showing a balance of Tk1,00,393 in his FSIB account on 5 July.
Although Tk437 had been credited as profit and Tk44 deducted as withholding tax, an attempt to transfer the money through bKash failed with the message: “This service is currently disabled by FSIB PLC.”
The liquidity stress extends beyond the five Islamic banks under restructuring.
Rakibul Hasan, a UK-based Bangladeshi expatriate, said he has spent two years trying to recover Tk20 lakh deposited at National Bank’s Gopalpur branch in Tangail after officials repeatedly cited inadequate liquidity.
Despite receiving Tk5,270 crore through Bangladesh Bank funding and interbank guarantees, National Bank has yet to regain stability. Deputy Managing Director Imran Ahmed declined to comment.
Bangladesh Bank spokesperson Arief Hossain Khan said the consolidated Islamic bank and other troubled lenders are now effectively operating under state supervision, and depositors should have the same confidence in them as they do in state-owned banks.
Responding to questions over why nearly Tk51,000 crore in liquidity support has yet to restore normal banking services, he said Bangladesh Bank has no legal authority to intervene directly in commercial banks’ treasury operations.
Its role is to regulate, supervise and provide policy guidance while continuing to support the banks through oversight and regulatory advice.
During the previous Awami League government, S Alam Group controlled FSIB, SIBL, Global Islami Bank and Union Bank, while Nassa Group controlled EXIM Bank and Sikder Group controlled National Bank.
According to Bangladesh Bank, weak governance, insider lending and large-scale loan irregularities severely weakened the institutions.
As part of the rescue programme, the interim government has merged five troubled Islamic banks into Sammilito Islami Bank PLC, now the country’s only state-owned Shariah-based commercial bank.
The new bank has authorised capital of Tk35,000 crore and has already received Tk20,000 crore in government funding. Half of the amount is being used to repay small depositors in phases, while the remainder has been invested in government Sukuk bonds.
The government has also appointed a new chairman, managing director and board.
Asked when Sammilito Islami Bank would become fully operational, newly appointed Managing Director Abedur Rahman Sikder told TIMES of Bangladesh that he could not comment because he had yet to formally assume office.
