Sammilito Islami Bank PLC will assume responsibility for the five distressed Shariah-based banks merged into the new institution in phases, with no timeline yet set for the transition. The board will take over each bank only after assessing its financial condition and operational readiness, while Bangladesh Bank will withdraw administrators only after management is handed over.
The decision was taken at a meeting on Monday from 6:30pm to 10:00pm at Bangladesh Bank headquarters between Governor Md Mostaqur Rahman, officials of the Bank Resolution Department, and the chairman, board members and managing director of Sammilito Islami Bank.
Bangladesh Bank Assistant Spokesperson Mohammad Shahriar Siddiqui confirmed the development to TIMES of Bangladesh.
Under the plan, the board will first meet the administrators of the five banks separately before assessing their financial condition, operational preparedness and restructuring progress. It will then determine the order of the handovers and submit a proposed transition schedule to Bangladesh Bank.
The central bank will withdraw administrators only from banks whose management has been transferred, rather than removing them from all five institutions simultaneously.
On Sunday, the governor separately met the administrators of the five banks and asked whether their withdrawal would create any operational difficulties. They said they were ready to return to Bangladesh Bank whenever instructed and briefed the governor on the condition of their respective banks, restructuring progress and remaining challenges. Several administrators confirmed the discussions to TIMES.
People involved in the restructuring, however, questioned whether a single board could effectively oversee five troubled banks simultaneously. Each bank is currently managed by an administrator supported by four officials, and sources said years of irregularities, non-performing loans, liquidity shortages and operational weaknesses mean extensive restructuring work remains. They also warned that managing all five banks could slow Sammilito Islami Bank’s own operations.
Sammilito Islami Bank was formed through the merger of EXIM Bank, Social Islami Bank, First Security Islami Bank, Global Islami Bank and Union Bank. The new state-owned Shariah-based bank has authorised capital of Tk35,000 crore and has received Tk20,000 crore in government capital support.
Information technology integration and other technical work are still incomplete. As a result, some operations, including foreign trade transactions, continue under the names of the former banks.
