Depositors begin withdrawing funds from 5 merging banks

Depositors of five troubled Islamic banks began withdrawing their funds on Thursday, marking the first step in a mega merger and signaling renewed confidence in country’s financial sector.

The banks reported a low rush of depositors and largely normal banking operations, further indicating stability.

The five banks; First Security Islami Bank, Union Bank, Global Islami Bank, Social Islami Bank, and Export Import Bank of Bangladesh, are being merged into Sammilito Islami Bank PLC, which will become the country’s largest bank in terms of financial assets.

The interim government initiated the merger process after repeated bailouts failed to restore the banks, which had been weakened by financial mismanagement during the previous Awami League administration.

On Tuesday, the Bangladesh Bank announced the “Bank Resolution Scheme,” outlining the process to withdraw funds.

Under the scheme, the smallest depositors – funds no more than Tk2 lakh – can withdraw the full amount at any given time. Those having bigger deposits can withdraw up to Tk1 lakh every three months for maximum two years.

Those avoiding withdrawals can enjoy interest on their savings and can also borrow sum against their deposits.

There are no restrictions for depositors facing health risks. Those aged over 60 or suffering from kidney or cancer-related illnesses can withdraw any amount at any time.

SH