Bangladesh Bank backtracks on no-profit call for Merged banks’ customers

Bangladesh Bank has reversed its earlier decision and approved profit payments for depositors of five merged Islamic banks, following public criticism and protests that forced temporary branch closures in parts of Dhaka and Cumilla.

The central bank communicated the decision to bank administrators through official letters. On Thursday, Bangladesh Bank spokesperson Arief Hossain Khan told bdnews24.com that depositors will receive profit for the 2024–25 financial year.

“The previous decision has been reviewed and changed,” Khan said. He added that administrators have been instructed to pay profit at a fixed rate of 4 percent for two years.

The reversal comes just a week after Bangladesh Bank issued a controversial order on Jan. 15 freezing all profit payments. At the time, the regulator said the banks had incurred losses and therefore could not distribute returns for 2024 and 2025.

The decision was described as a “haircut” on deposits, with the central bank citing international bank resolution standards and Shariah principles, which require losses to be shared when profits are unavailable.

The banks involved—EXIM Bank, First Security Islami Bank, Global Islami Bank, Union Bank, and Social Islami Bank—were selected for merger after being weakened by a prolonged financial crisis.

To address the situation, the interim government granted final approval on Dec. 1, 2025, to form a new state-owned entity, Sammilito Islami Bank. Of the bank’s Tk 350 billion in paid-up capital, the government contributed Tk 200 billion.

Under the earlier plan, deposits were to be recalculated based on balances as of Dec. 28, 2025, excluding any profit earned between Jan. 1, 2024, and that date. This adjustment effectively reduced deposit values to determine final balances.

The suspension of profit payments triggered protests by depositors, leading to branch closures. Managers at First Security Islami Bank’s Tongi branch in Dhaka and the Dhorkara Bazar branch in Cumilla reported disruptions and formally notified their head office.

Following the demonstrations, Bangladesh Bank withdrew its no-profit directive, restoring profit payments for depositors.