The proposed Sommilito Islami Bank is set to begin operations with Tk 20,000 crore in paid-up capital, fully injected by the government, according to a Finance Ministry directive to amend the upcoming bank’s draft Memorandum and Articles of Association.
Out of the total 2,000 crore shares, six will be allocated to individual subscribers mentioned in the draft Memorandum and Articles of Association, while the remaining 1,999,999,994 shares will be held in the name of the Finance Secretary, the ministry letter said.
The instruction, issued on 2 November by the Treasury and Debt Management Wing of the Finance Division, indicated that the bank’s board will have seven shareholder-directors, with the Finance Secretary expected to lead the board as the government will hold virtually the entire ownership.
The new entity will take over all assets and liabilities of five financially distressed Shariah-based banks — First Security Islami Bank, Social Islami Bank, Exim Bank, Global Islami Bank, and Union Bank — forming a single, state-owned Shariah-compliant commercial bank.
As the merging institutions have deep negative equity, existing shareholders will not retain any stake in the new bank.
Small depositors will receive compensation under the Deposit Insurance Scheme, while large institutional depositors will be offered equity participation up to Tk 15,000 crore in due course.
Officials said the consolidation is part of the government’s broader effort to restore stability and discipline in the banking sector.
They added that the state-owned entity would eventually move towards restructuring and gradual privatisation once its capital base and asset quality improve.
The new bank will ensure a capital not less than 10% of its risk weighted assets, or as instructed by the Bangladesh Bank from time to time.
