Sammilito Islami Bank gets Tk44cr in new deposits in two days: BB governor

Customers of newly formed Sammilito Islami Bank withdrew Tk107 crore over the past two days while new deposits amounted to Tk44 crore, reflecting continued confidence among depositors, Bangladesh Bank Governor Ahsan H Mansur said today.

Speaking at a press briefing at the Bangladesh Bank headquarters in the capital, the governor highlighted that the net withdrawal of Tk63 crore in two days after restart of its transaction was "extremely satisfactory" for a bank of the consolidated entity's capital size.

He noted the new bank, which resulted from the merger of five troubled entities, processed 13,314 total transactions. The governor pointed out that in several branches, the amount of new deposits actually surpassed withdrawals, which he believes reflects growing depositor trust.

The briefing was attended by the chairman of Sammilito Islami Bank and the administrators of the five merged banks.

Sammilito Islami Bank Chairman Ayub Mia confirmed that customers could currently receive a minimum of Tk2 lakh from the insurance fund. He added that patients with critical illnesses such as cancer and dialysis would be able to withdraw their entire deposits, though temporary IT system complexities were delaying full payment to some.

Ayub said the bank is currently operating using the separate IT systems of the five merged banks. Bangladesh Bank's IT team has already started work on developing a new integrated software system.

Investigating past irregularities

The governor said the bank's board has decided to initiate a forensic audit to investigate past mismanagement and irregularities. The audit will examine how depositors' funds were misused and identify the involvement of any bank officials or borrowers. Based on the findings, information will be handed over to relevant investigative agencies or the Anti-Corruption Commission (ACC) for action against those responsible.

He said employment would be ensured for competent, honest and qualified staff among the bank's existing workforce of more than 16,000 employees.

Repayment of customer deposits

The governor further said a clear resolution scheme has been put in place under the Bank Resolution Ordinance to ensure full repayment of customer deposits. About 95% of the bank's depositors have balances below Tk2 lakh and are fully protected, enabling them to withdraw their entire deposits easily. 

Larger depositors, however, will not be able to withdraw their full amounts for the next two years, though they may access instant loans equivalent to up to 20% of their deposits if liquidity is required, Mansur said.

He also said that while the board has initially been formed with government representatives, the process of appointing private-sector representatives is under way. Although the bank is currently state-owned, it will operate entirely under private management.

Responding to a journalist's question, the governor said that strict steps are being taken to restore discipline in the country's Non-Bank Financial Institution (NBFI) sector. The legal process to declare nine NBFIs as "non-viable" or ineffective, based on a recent review, will begin this very week.

Masnur informed that auditors would be appointed to verify the actual financial condition of these ineffective institutions. The objective is to precisely determine their total liabilities or "negative net worth" – whether it is Tk100 crore or Tk10,000 crore.

The governor stated that he is hopeful that the principal amounts of private sector depositors in these financial institutions can be refunded before the end of Ramadan. However, shareholders are unlikely to get their invested money back. A plan has been adopted to use a special government fund to pay off the money owed to general depositors.

When asked about other weak banks in the country, Mansur said that the "Bank Resolution Department" is working on them. Already, Islami Bank Bangladesh and United Commercial Bank have successfully achieved financial solvency.

He added that other weak banks are also being given a specific action plan, or a "Pathway to Success," to enable them to meet their obligations to depositors.

The governor said, "An additional Tk20,000 crore may be required to resolve the crises of the remaining weak banks. Since this fund is not allocated in the current budget, it will depend on the next budget and a government decision."

He noted, "Currently, there is no separate 'Resolution Fund' in the country; out of the Tk19,000 crore in the Deposit Insurance Scheme, Tk12,000 crore has already been used."

When questioned about loan defaulters participating in elections, the governor said that if any loan defaulter secures a stay order from the High Court, the central bank has no option but to comply with it.