Officials at Bangladesh Bank have announced that depositors of five Islamic banks affected by the recent crisis and subsequent merger will start receiving their funds from next week.
A senior central bank official, who requested to remain anonymous, indicated that the procedural complications related to the repayment process have been addressed, allowing disbursements to commence as early as Monday or Tuesday.
Repayments will occur through the nation's deposit insurance scheme, allowing customers to withdraw funds directly from their individual bank branches.
The official stated that depositors holding multiple accounts at the same bank would be permitted to withdraw funds from only one account. Customers with accounts at multiple merged banks can withdraw the insured amount from each bank individually.
What is the withdrawal limit for depositors?
Bangladesh Bank officials have stated that depositors with balances of Tk 200,000 or less will be able to withdraw their full amount in one go once the scheme is implemented.
Individuals with deposits surpassing Tk 200,000 will be permitted to withdraw a maximum of Tk 100,000 every three months, for a duration of up to two years.
Special provisions have been established for depositors who are over 60 years old, as well as for those battling cancer or other serious illnesses. Customers in this category will be allowed to withdraw greater amounts according to their requirements.
Context surrounding the merger
During the previous Awami League government's tenure, various influential groups reportedly secured substantial loans from several banks through deceptive practices. Due to increasing irregularities and loan defaults, several banks slowly descended into significant financial trouble.
Five of the impacted Islamic banks have merged to create a new entity, United Islami Bank PLC, which is headquartered at Sena Kalyan Bhaban in Dhaka.
The banks participating in this matter include EXIM Bank, Social Islami Bank, First Security Islami Bank, Global Islami Bank, and Union Bank.
The newly established bank has its paid-up capital established at Tk 350 billion, with the government contributing Tk 200 billion and the remaining Tk 150 billion sourced from depositors’ shareholdings. The authorised capital has been set at Tk 400 billion.
Bangladesh Bank data indicates that the five banks collectively possess deposits totalling approximately Tk 1.42 trillion from about 7.5 million depositors. Conversely, the total outstanding loans reach approximately Tk 1.93 trillion, with a significant portion having already become non-performing.
The banks operate 760 branches, 698 sub-branches, 511 agent banking outlets, and 975 ATM booths across the country. After the merger, branches that overlap in the same regions will be combined into one or two locations.
Officials stated that employee salaries and benefits have already been reduced by 20 percent to lower operational costs.
