Sammilito Islami Bank gets BB nod

Sammilito Islami Bank, the proposed largest shariah-based state-owned bank set to be formed through the merger of five troubled banks, got the preliminary approval from the Bangladesh Bank yesterday.

The central bank issued the Letter of Intent (LOI) to the Ministry of Finance on the same day, following on-circulation approval from the regulator's board, officials familiar with the matter told The Daily Star.

The approval also followed meetings between BB Governor Ahsan H Mansur, Finance Adviser Salehuddin Ahmed, and other officials concerned.

Earlier, the finance ministry, acting on behalf of the government, submitted an application to the central bank last Wednesday.

Nazma Mobarek, secretary of the Financial Institutions Division (FID), will serve as the chairman of the new bank's seven-member board.

The other board members are Md Khairuzzaman Mozumder, secretary of the Finance Division; M Saifullah Panna, secretary, Chief Adviser's Office; Md Kamal Uddin, secretary of the Ministry of Religious Affairs; Md Shahriar Kader Siddiky, secretary of the Economic Relations Division; Mohd Rashedul Amin, joint secretary of the Finance Division; and Sheikh Farid, joint secretary of the FID.

Following the central bank's preliminary approval, the finance ministry will now apply to the Registrar of Joint Stock Companies (RJSC) to formally establish the bank.

The ministry has also allocated Tk 20,000 crore to a separate account for the new bank, central bank officials said on condition of anonymity.

Earlier, on November 5, the banking regulator took temporary control of the five troubled Shariah-based banks by dissolving their boards as part of the formal merger process.

Prior to dissolving the boards, Governor Mansur met with the chairmen and managing directors of the five banks – First Security Islami Bank, Union Bank, Global Islami Bank, Social Islami Bank, and EXIM Bank of Bangladesh – to inform them of the decision.

On the same day, the central bank sent letters to the chairmen of the five banks stating that the lenders had been placed under the resolution process in accordance with Section 15 of the Bank Resolution Ordinance, 2025.

The central bank declared the five banks non-functional, Mansur announced at a press conference following meetings with the banks' top officials.

Each bank was later assigned one temporary administrator along with an assisting team to carry out its responsibilities.

The authorised capital of the new bank will be Tk 40,000 crore (with each share valued at Tk 10, totalling 4,000 crore shares), while the paid-up capital will be Tk 35,000 crore.

Of this, Tk 20,000 crore will be provided by the government as shares, according to a draft notification from the Ministry of Finance. The rest will come from depositors' money through the issuance of shares to them.

Once the new bank is established, depositors will be given priority in reclaiming their funds.

As part of the merger, the central bank has drawn up a detailed roadmap with specific timelines for the repayment process. This will be announced soon via an official gazette, with the repayment schedule taking effect from the date specified. A draft of the gazette has already been prepared.

Savings of up to Tk 2 lakh, considered protected deposits, will require no waiting period and will be paid immediately following the merger.