Depositors in Distress: New 'Shariah Giant' Bank Faces Severe Liquidity Crunch

The grand merger of five struggling Shariah-based banks into the state-owned Sammilito Islami Bank PLC has so far failed to resolve the liquidity crisis, leaving thousands of depositors unable to access their savings. Despite the consolidation, branches are reportedly reeling from a cash shortage, with some customers unable to withdraw funds for months.

The merger combining Exim Bank, First Security Islami Bank, Global Islami Bank, Social Islami Bank, and Union Bank was intended to stabilize the Islamic banking sector. However, the reality on the ground remains grim.

Withdrawal Blocks: Retirees and regular account holders report being repeatedly turned away by branch managers.

Eroding Trust: Public confidence has plummeted, with many branches operating in "near silence" as customers lose hope of retrieving their deposits.

Funding Confusion There is significant ambiguity regarding the Tk 20,000 crore in government capital promised for the bank. While the bank’s management awaits the funds to resume operations, Bangladesh Bank officials clarified that no core capital has been officially disbursed yet. This disconnect has left branch-level officials without the "written instructions" or cash needed to process withdrawals.

Structural Reforms and Employee Concerns The new entity is set to have an approved capital of Tk 40,000 crore. The rescue plan involves a "bail-in" process, where Tk 15,000 crore from institutional depositors will be converted into bank shares.

Workforce: Over 18,000 employees are transitioning from private to government-owned status, leading to uncertainty regarding pay structures and long-term job security, especially as the government plans to privatize the entity again within five years.

Prioritization: Chairman Dr. Mohammad Ayub Mia stated that restoring confidence is the priority, with a promise that small depositors will be the first to receive their money as funds become available.