Merged banks’ deposits to be transferred to Sommilito Islami Bank next week

The process of transferring depositors' accounts from the five banks undergoing a merger to the newly formed Sommilito Islami Bank is nearing completion and is expected to be finalised within the next week, according to Bangladesh Bank (BB).

Once completed, deposits of customers of the five banks will be automatically transferred to accounts at the new bank, BB spokesperson Md Areif Hossain Khan said in a statement yesterday.

Following the transfer, depositors will be able to withdraw up to Tk 2 lakh using their existing cheque books.

Any remaining balance will remain secured in their accounts, and depositors will continue to receive profit on their deposits at the prevailing rates, he said.

The five banks are First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, and EXIM Bank.

The central bank spokesperson expressed hope that public confidence in the newly formed bank would be strengthened, as it will operate as a state-owned institution.

"People's trust is expected to increase, which should significantly reduce pressure from deposit withdrawals," he added.

The merger of the five troubled shariah-based lenders into a single entity is part of the government's broader effort to stabilise the banking sector and restore confidence amid mounting concerns over asset quality and liquidity, according to the statement.

Last week, the BB instructed the five shariah-based banks undergoing a merger to declare their shareholders' equity at zero after assessments showed the net asset value of their shares to be negative.

"An assessment found that the net asset value per share of these banks is negative," Khan said. "As a result, the shareholders' equity has been written down to zero."

On November 30, Bangladesh Bank granted the final licence to Sommilito Islami Bank PLC, formed through the merger of the five lenders. It is now the largest state-owned shariah-based bank in the country.

The central bank said the approval was part of a broader banking sector reform programme launched in September 2024 to restore governance, ensure accountability and bring discipline to the financial system.

The office space for the new bank has been fixed at Sena Kalyan Bhaban in Motijheel. Besides, a seven-member board has been formed for the bank, and former senior secretary Mohammad Ayub Mia has been appointed as its chairman.

However, the official operations of the bank have yet to begin, as the lender is still without a management team.

Earlier this month, the government called for applications by December 22 for the appointment of managing director and CEO of Sommilito Islami Bank.

In a notification, the finance ministry said applicants should hold a postgraduate or master's degree, preferably in economics, finance, accounting, banking, management or business administration from a recognised university.

The authorised capital of Sommilito Islami Bank stands at Tk 40,000 crore, with each share valued at Tk 10, amounting to 4,000 crore shares. The paid-up capital will be Tk 35,000 crore.

Of this, Tk 20,000 crore has already been provided by the government, which will hold Class A shares, according to the finance ministry.

Another Tk 7,500 crore will come from permanent deposits of depositors of the transferring banks and financial institutions, converted into equity and designated as Class B shares.

The remaining Tk 7,500 crore will be sourced from deposits of other institutional depositors, excluding banks, financial institutions and multinational companies. These will be converted into equity and classified as Class C shares.