Resolution scheme finalised for merged banks: How long for depositors to get their money back
The central bank prepared the scheme under its supervision to protect depositors and ensure financial stability after the normal operations of the five banks collapsed due to long-standing irregularities, acute liquidity shortages and high levels of defaulted loans.
Bangladesh Bank has finalised the Bank Resolution Scheme, 2025 for Sammilito Islami Bank PLC, a newly formed institution created by merging five crisis-hit Shariah-based banks, setting out a phased plan for returning depositors' funds.
The central bank prepared the scheme under its supervision to protect depositors and ensure financial stability after the normal operations of the five banks collapsed due to long-standing irregularities, acute liquidity shortages and high levels of defaulted loans.
A copy of the resolution scheme was obtained by The Business Standard.
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Sammilito Islami Bank has been formed by merging EXIM Bank, First Security Islami Bank, Global Islami Bank, Social Islami Bank and Union Bank.
How depositors will get their money back
Under the resolution scheme, the timeline for withdrawing deposits depends on the amount held by each customer.
Deposits of up to Tk2 lakh will remain fully protected. Under the Deposit Insurance Act, these funds can be withdrawn from the new bank at any time without restriction.
For deposits exceeding Tk2 lakh, payments will be made in instalments. The first Tk2 lakh will be withdrawable at any time.
For every additional Tk1 lakh, depositors will be allowed to withdraw once every three months.
Any remaining balance will be withdrawable 24 months after the scheme's effective date.
FDRs
Customers holding fixed deposits (FDRs) with a tenure of three months or more will not be allowed to encash them before maturity.
According to the scheme, such deposits will be automatically renewed.
Fixed deposits with a three-month term will undergo three automatic renewals.
Deposits with a tenure of one to two years will be treated as three-year term deposits, while deposits with a tenure exceeding four years will be withdrawable only after the term expires.
Special provisions for critically ill depositors
On humanitarian grounds, the scheme allows flexibility for depositors suffering from serious illnesses, including cancer and those undergoing kidney dialysis.
Such customers will be permitted to withdraw funds beyond the prescribed limits based on their needs.
Share conversion for institutional depositors
A significant portion of fixed deposits held by banks and financial institutions—amounting to around Tk7,500 crore—will be converted into Class-B shares of Sammilito Islami Bank.
For other institutions and trusts, part of their deposits will also be converted into shares, with the possibility of receiving dividends in the future.
Why the resolution was needed
Bangladesh Bank said repeated liquidity support over the past year failed to bring sustainable improvement to the financial condition of the five banks.
Weak governance and a high volume of defaulted loans made it impossible to return depositors' money through conventional means.
As a result, the central bank decided to merge the banks under the Bank Resolution Ordinance, 2025.
The authorised capital of Sammilito Islami Bank has been set at Tk40,000 crore, with paid-up capital of Tk35,000 crore.
The bank is currently managed by a seven-member board of directors nominated by Bangladesh Bank.
