Around 37,000 depositors have applied to withdraw Tk2,300 crore from five troubled Islamic banks in just two days after Sammilito Islami Bank began accepting claims for the return of deposits. On average, each depositor has sought around Tk6.2 lakh.
Of the amount sought, several thousand customers have applied to withdraw around Tk1,000 crore in principal alone, agreeing to forgo any profit accrued on their deposits. The remaining Tk1,300 crore has been claimed by depositors seeking both principal and profit.
The applications began on Tuesday across branches of the five banks merged into the state-owned Sammilito Islami Bank PLC, triggering increased customer turnout at branches. Bank officials welcomed customers arriving to submit withdrawal applications with flowers.
According to officials of the merged banks, around 18,000 depositors applied on the first day for the return of Tk1,300 crore. Another 19,000 customers submitted claims for around Tk1,000 crore on Wednesday.
Applications will be accepted until Sunday. After scrutiny and verification, Sammilito Islami Bank is scheduled to begin making payments to eligible depositors from September 7.
Customers are required to submit their applications at the respective branches or sub-branches of the five merged banks under the prescribed procedure.
Sammilito Islami Bank Managing Director Abedur Rahman Sikder said the number of applications remained small compared with the bank’s total depositor base.
“Out of 84 lakh customers, we received 18,000 applications on the first day from those seeking to withdraw their entire principal at once,” Sikder said in a video message circulated by the bank’s public relations department.
“This number is very small compared with the total number of depositors. It shows that people still have considerable confidence in us,” he said.
The five banks were merged after a severe deterioration in their financial condition left them struggling to repay depositors.
Four of them, Social Islami Bank, First Security Islami Bank, Global Islami Bank and Union Bank, had been controlled by Chattogram-based businessman Saiful Alam’s S Alam Group. EXIM Bank had been controlled by Nassa Group Chairman Nazrul Islam Mazumder. Both businessmen were close to ousted prime minister Sheikh Hasina.
Around 80 per cent of the five banks’ loans turned bad following extensive irregular lending during the tenure of their previous owners, eventually leaving the lenders unable to meet depositors’ withdrawal demands.
Under Bangladesh Bank’s instructions, individual depositors will be allowed to withdraw balances from current and savings accounts as well as the principal amount of term deposits. However, customers opting for immediate withdrawal under the facility will not receive accrued or payable profit on those deposits.
Once a depositor withdraws the principal under the arrangement, the deposit will be treated as fully and finally settled.
Customers who choose not to withdraw their deposits immediately may keep their accounts active and remain eligible for profit at the applicable contractual rate.
Following the political changeover in August 2024, the interim government moved to merge the five distressed Shariah-based lenders into Sammilito Islami Bank and brought the new entity under state ownership.
The repayment process marks the first major test of the merged bank’s ability to restore access to deposits that had remained stuck at the five troubled lenders.
