Customers of five merged banks can withdraw deposits as needed from 1 Sept

Depositors of Sammilito Islami Bank PLC will not face any “haircut” on their deposits. From 1 September, individual depositors will be able to withdraw the principal amount of their deposits as needed.

The decision was communicated during a meeting today between Bangladesh Bank Governor Md Mostaqur Rahman and Sammilito Islami Bank Chairman Kazi Shairul Hasan and Managing Director Abedur Rahman Sikder.

Deputy Governors Md Habibur Rahman, Md Kabir Ahmed, Md Sarwar Hossain and Md Anis Ur Rahman were also present. Bangladesh Bank disclosed the information in a statement.

At the meeting, the governor said that although the finance minister had announced in parliament that there would be no “haircut” on depositors’ profits, some confusion remained among depositors. The bank must therefore clearly inform all its depositors that no haircut will be imposed on their profits.

Meanwhile, deposits are already being repaid in accordance with the scheme announced on 29 December last year. From 1 September, individual depositors will also be able to withdraw the principal amount from Al-Wadiah current accounts, Mudaraba savings accounts and Mudaraba term deposits as needed. Sammilito Islami Bank has been instructed to make the necessary arrangements.

On 14 January this year, Bangladesh Bank decided to impose a haircut, or profit reduction, on the five merged banks. In a letter sent to the administrators of the five banks, the central bank said depositors would not receive profits on their balances for 2024 and 2025.

Bangladesh Bank had decided to apply the two-year profit haircut in line with international practice. As a result, part of the returns on depositors’ funds was withheld.

According to Bangladesh Bank’s statement, Sammilito Islami Bank PLC was formed with capital of around Tk 350 billion, making it the country’s largest and only state-owned Islamic bank. The bank has been instructed to take the necessary steps to restore its operations to normal as quickly as possible.

As a result, officials expect the bank to further expand the scope of normal transactions available to individual depositors from 1 September.

Although such practices exist in various countries, depositors had protested the decision from the outset. The rule has now been withdrawn.