Social Islami Bank (SIBL) has applied to exit from the state-owned Sammilito Islami Bank PLC and restructure as a separate entity, marking the first formal attempt to break away from the merged banking structure.
Rezaul Haque, an entrepreneur director and former chairman of SIBL, submitted the application to Bangladesh Bank on Monday, officials confirmed.
Jabedul Alam Chowdhury, a former director of the bank’s dissolved previous board, said, “After the Bank Resolution Ordinance became law, we applied under the provision of section 18(a).”
He informed that the application was made on behalf of the previous board with the consent of its members.
Bangladesh Bank spokesperson and Executive Director Arif Hossain Khan said the application would be considered according to the law once it reaches the relevant department. “It is not yet time to say anything,” he added.
The application comes four months after the formation of SIBL applies to exit Sammilito Islami Bank on 21 December last year. The state-owned bank was created by merging five Shariah-based banks — Exim Bank, First Security Islami Bank, Global Islami Bank, Union Bank and SIBL — which were struggling with money laundering, high defaulted loans and liquidity crises.
On 5 November last year, at the start of the merger process, Bangladesh Bank declared the shares of those five banks zero and classified them as “non-viable”.
When the Bank Resolution Ordinance was later converted into law, section 18(a) was added, providing an opportunity for former shareholders to return. The current application has been filed on the basis of this section.
The application proposes separating SIBL, injecting new capital, improving liquidity and restoring discipline in its operations. It states that risk assets will be reduced, defaulted loan recovery strengthened, and the capital structure reinforced.
If given responsibility, the defaulted loan rate will be reduced to 25 percent by December this year, the proposal states. Additionally, there is a plan to recover approximately Tk500 crore by reactivating 22 suspended government accounts.
The application also requests liquidity support of Tk11,000 crore from Bangladesh Bank for the next 10 years.
The application has been signed by former directors Hakim Md Yusuf Harun Bhuiyan, Sultan Mahmud Chowdhury, Afia Begum and Jabedul Alam Chowdhury.
