Merged banks to be named 'Sammilito Islami Bank'

The Bangladesh Bank has begun implementing the decision to merge the country’s five Shariah-based banks.

As part of this initiative, central bank officials have started collecting various data from the respective banks.

Discussions are underway regarding the management of manpower and branch networks once the merger is complete. The central bank is also consulting with the banks on how to handle potential pressure from depositors.

Meanwhile, the government-formed committee overseeing the merger process has initiated steps to establish the new bank.

Upon approval from the Ministry of Law and the Bangladesh Bank, the bank’s registration will be completed. The proposed name for the new entity has been finalised as Sammilito Islami Bank.

The merger will combine First Security Islami Bank, Union Bank, Global Islami Bank, Social Islami Bank and EXIM Bank, all of which have faced crises due to irregularities and corruption.

Sammilito Islami Bank will acquire these institutions and the government will provide 200 billion (20,000 crore) taka in capital support, making it a state-owned bank at the outset.

For the past year, the Bangladesh Bank has been working on the merger of these five banks. It has undertaken several initiatives, including the drafting of legal and policy frameworks, assessing the assets and liabilities of the troubled banks, issuing show-cause notices and granting time for compliance. On 9 October, the Advisory Council of the Interim Government approved the proposal for the merger of the five banks.

According to the approved plan, the new bank’s authorised capital will be 400 billion (40,000 crore) taka, with a paid-up capital of Tk 350 billion (35,000 crore).

Of this, the government will provide Tk 200 billion (20,000 crore), Tk 100 billion (10,000 crore) in cash and the remaining 100 billion (10,000 crore) taka through the issuance of Sukuk bonds.

Institutional depositors’ funds worth Tk 150 billion (15,000 crore) will be converted into equity through share transformation. Under this process, a portion of customers’ and other creditors’ loans will be converted into shares, which will later be liquidated under a long-term plan.

Sources from the government-formed committee stated that the memorandum and articles of association for the new bank are in the final stages of preparation. They are expected to be sent to the Ministry of Law for review by Tuesday.

Upon receiving clearance, the documents will be forwarded to the Bangladesh Bank for approval and subsequently to the Registrar of Joint Stock Companies and Firms (RJSC) for registration. Once the government injects the capital, the Bangladesh Bank will assume responsibility for the five banks.

According to Bangladesh Bank sources, the deposits, loans and treasury operations of the five banks will be re-audited. In addition, assessments are ongoing concerning the workforce, technology divisions and network infrastructures of the banks.

A Bangladesh Bank official involved in the merger process, speaking to Prothom Alo on condition of anonymity stated, “Many district towns have branches of all five banks. In such towns, one or two branches will remain operational while the others will be relocated to different upazilas. A list of possible relocation sites is being prepared. We are also assessing the manpower required to operate these branches. The new name for the merged banks is expected to be formalised within this year.”

When contacted, Mohammad Nurul Amin, Chairman of Global Islami Bank, told Prothom Alo, “We are awaiting the official written decision regarding the merger. However, informal steps have already begun. Calculations related to deposits, loans, staff, branches and ATM networks are currently underway. We hope the formal process will start soon.”