Bangladesh Bank has reversed its earlier decision and approved profit payments for depositors of five merged banks, bowing to criticism and protests at branch level.
The central bank informed the administrators of the five banks of the revised decision through official letters.
Bangladesh Bank spokesperson and Executive Director Arif Hossain Khan said on Thursday that depositors of the five banks would receive profit for the 2024–2025 period, following a review of the earlier decision.
Under the revised directive, administrators have been instructed to pay profit at a rate of 4 percent for a two-year period.
Earlier, on 15 January, Bangladesh Bank had announced that depositors of the banks would not receive any profit for 2024 and 2025, citing losses incurred by the institutions.
In letters sent to the banks, the regulator described the move as a “haircut” (deduction of a portion of deposits), stating that under international standards and Shariah principles, profit could not be paid in loss-making situations.
The banks involved are Shariah-based Exim Bank, First Security Islami Bank, Global Islami Bank, Union Bank and Social Islami Bank, all of which were under severe financial stress. The government decided to merge the five institutions and form a new bank.
On 1 December, Bangladesh Bank issued a final licence for the newly formed entity under the name United Islami Bank. The fully state-owned bank has a paid-up capital of Tk 35,000 crore, of which the government has contributed Tk 20,000 crore.
In its earlier communication on withholding profit, the central bank said the decision was taken to ensure balanced implementation of the resolution scheme.
It also instructed banks to reassess deposit balances based on their status as of 28 December 2025. For the period from 1 January 2024 to 28 December 2025, no profit or return was to be considered on any deposits, and a haircut (deduction of a portion of deposits) would be applied accordingly to determine final balances.
The decision sparked protests by depositors at several branches. Demonstrations began at branch level, prompting managers of First Security Islami Bank’s Tongi branch in the capital and the Dhorkara Bazar branch in Cumilla to shut operations temporarily and write to the bank’s head office.
Amid mounting protests, Bangladesh Bank withdrew its earlier decision within a week, paving the way for profit payments to depositors of the merged banks.
