On the first day of the new year, the signboards of five banks currently in the process of merging were changed.
The previous signboards have also been retained alongside the new ones. In addition, normal banking operations of the five banks have resumed.
Customers of these banks are now able to withdraw up to Tk 200,000 from their current and savings accounts. Bangladesh Bank has permitted such transactions to be carried out using cheques of the former banks.
On Thursday morning, the first day of the year, it has been seen that the head offices and several branches of the five banks revealed that signboard bearing the name of the merged entity, Sammilito Islamic Bank, has already been installed at some locations, while installation is ongoing at others.
Bank officials have also confirmed that new signboard is being installed at branches outside Dhaka. They stated that, for the time being, both the old bank signage and the new one will remain in place.
Gradually, the old one will be removed and the five banks will thereafter be known solely as Sammilito Islamic Bank.
Under a government decision, five private Islamic banks are being merged to form a new bank. These banks are First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank and EXIM Bank.
The newly formed Sammilito Islamic Bank will assume the liabilities, assets and workforce of these five banks. Upon completion of the merger process, the five banks will be gradually dissolved.
Bangladesh Bank issued a notification on Tuesday publishing the detailed scheme or programme for the formation of the new bank.
The scheme clarifies the capital structure of the new bank as well as the future of institutional depositors of the five banks.
Among the five banks undergoing the merger, EXIM Bank was under the control of Nazrul Islam Mazumder, former chairman of the Bangladesh Association of Banks (BAB).
The remaining four banks were under the control of Saiful Alam, the head of the S Alam Group in Chattogram and a widely discussed businessman. Both individuals were close associates of the ousted prime minister, Sheikh Hasina.
They held a share in these banks both directly and indirectly and were the principal beneficiaries of most of the loans. For this reason, as part of the merger process, Bangladesh Bank has declared all shares of these banks to be void.
According to the scheme announced by Bangladesh Bank, the authorised capital of the newly formed bank through the merger of the five Islamic banks has been set at Tk 400 billion (40,000 crore), while the paid-up capital has been fixed at Tk 350 billion (35,000 crore).
Of this paid-up capital, the government has already provided Tk 200 billion (20,000 crore), which will be treated as “category A” shares under the resolution scheme.
An amount of Tk 75 billion (7500 crore) will be converted into shares from the fixed deposits of banks and financial institutions that are depositors of the five banks, and these will be considered “category B” shares.
In addition, a further Tk 75 billion (7500 crore) will be converted into shares from the fixed deposits of other institutional depositors outside the banking and financial sector, which will be treated as “category C” shares.
The scheme states that the head office of the newly formed Sammilito Islamic Bank will be located at Sena Kalyan Bhaban in Motijheel, Dhaka.
Deposits of up to Tk 200,000 held with the five banks will be withdrawable at any time from the effective date of the merger. In the case of deposits exceeding Tk 200,000, the first Tk 100,000 may be withdrawn three months after the scheme comes into effect.
Thereafter, Tk 100,000 may be withdrawn at intervals of 6, 9, 12, 15, 18, and 21 months. The remaining balance will be withdrawable after 24 months. The same withdrawal schedule will apply to institutional depositors.
Regarding term and fixed deposits, the scheme states that up to a maximum of 20 per cent of such deposits may be availed as investment or loan facilities.
Fixed deposits of varying tenures will be automatically renewed or converted into longer-term deposits in accordance with the specified timeframes. Deposits with a tenure exceeding four years will be payable upon maturity.