Bangladesh merges five Islamic lenders into single state-backed bank
Central bank-led consolidation creates Sammilito Islami Bank, restructures capital, converts institutional deposits, and guarantees protection for retail savers
DHAKA, Bangladesh (MNTV) — Bangladesh Bank has finalized a sweeping consolidation plan to merge five financially stressed Shariah-compliant lenders into a single entity, forming Sammilito Islami Bank PLC, in one of the most significant regulatory interventions in the country’s Islamic banking sector.
Under the resolution scheme released on Tuesday, the newly created bank will absorb First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, and EXIM Bank. The move is aimed at stabilizing the sector amid prolonged liquidity pressures, weak governance, and rising concerns over depositor confidence.
The central bank has set an authorized capital of 400 billion Bangladeshi taka ($3.2 billion) for the merged institution, with paid-up capital fixed at 350 billion taka ($2.8 billion). The ownership structure introduces a three-tier shareholding model designed to recapitalize the bank while limiting immediate fiscal exposure.
Under this framework, the government will inject 200 billion Bangladeshi taka ($1.6 billion) as equity, making it the largest shareholder.
A further 75 billion Bangladeshi taka ($611 million) will be raised by converting fixed deposits held by domestic banks and financial institutions within the five merged lenders into shares. Another 75 billion taka will come from the conversion of fixed deposits belonging to non-bank institutional investors.
However, regulators have carved out exemptions to shield sensitive and socially critical entities. Educational and religious institutions, hospitals, employee provident and gratuity funds, joint ventures, multinational corporations, and foreign diplomatic missions will not be subject to mandatory deposit-to-equity conversion.
To prevent panic among retail savers, Bangladesh Bank has outlined a set of depositor protection measures. Individual deposits of up to 200,000 taka ($1630) will remain fully protected under the country’s deposit insurance framework and can be withdrawn without restriction.
For balances exceeding that threshold, withdrawals from savings and current accounts will be permitted in scheduled installments over a 24-month period.
The scheme also includes humanitarian provisions. Depositors facing critical medical needs, including cancer treatment or kidney dialysis, will be allowed to access funds beyond prescribed limits to meet essential healthcare costs.
The central bank said the consolidation is intended to restore stability, strengthen capital adequacy, and improve oversight in Islamic banking, which accounts for a growing share of Bangladesh’s financial system.
The regulator also unveiled the official logo of Sammilito Islami Bank alongside the notification, signalling the formal launch of the new institution.
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