The future of Sammilito Islami Bank PLC has plunged into fresh uncertainty as two major merged banks - Social Islami Bank PLC and EXIM Bank PLC - are reportedly preparing to withdraw from the troubled consortium, intensifying fears over the stability of Bangladesh's largest Islamic banking rescue initiative.
The crisis has deepened further as the newly created state-backed bank, formed by merging five financially distressed Shariah-based banks, continues to operate without a chairman or managing director months after the change in government, leaving the institution effectively leaderless at a critical moment.
Banking insiders say the merger process has virtually stalled amid policy uncertainty, regulatory indecision and growing pressure from former bank owners seeking to regain control under the newly amended banking resolution law.
"Sammilito Islami Bank is now trapped in uncertainty from all sides - leadership, liquidity and ownership".
The vacuum at the top has fuelled panic among depositors and investors across the country, triggering daily protests, human chains and mounting withdrawal pressure at several branches.
Some customers have reportedly locked bank branches in anger, while many others continue rushing to withdraw savings amid fears over the bank's future.
"Sammilito Islami Bank is now trapped in uncertainty from all sides - leadership, liquidity and ownership," said a senior banking analyst. "Without clear direction from the government and the central bank, confidence is collapsing rapidly."
The bank was formed last year under the interim government's Bank Resolution Ordinance 2025 as part of an emergency effort to stabilise Bangladesh's fragile banking sector after years of financial irregularities and governance failures.
Under the plan, five crisis-hit Islamic banks - EXIM Bank, Social Islami Bank, First Security Islami Bank PLC, Union Bank PLC and Global Islami Bank PLC - were merged into a single entity named Sammilito Islami Bank in a bid to protect depositors and restore confidence.
Initially, the move generated cautious optimism within the financial sector. However, implementation slowed sharply following political changes and the introduction of the amended Bank Resolution Act-2026.
The situation became more volatile after the inclusion of Section 18-K in the revised law, which opened the possibility for former owners to reclaim control of their banks.
The provision has triggered widespread speculation that the merged entity could eventually be dismantled, severely weakening depositor confidence and further disrupting liquidity flows.
According to banking sources, new deposits have almost dried up, while existing clients are aggressively seeking withdrawals of principal savings. At the same time, loan recovery operations have weakened significantly, worsening the bank's already fragile financial position.
Despite the formation of a board, the appointed chairman later resigned, while the designated managing director has yet to assume office. More than two months after the current government took charge, both key leadership positions remain vacant.
Officials involved in the process said neither the government nor Bangladesh Bank has yet provided a clear roadmap regarding the future structure of the merged institution.
Bangladesh Bank Governor Mostaqur Rahman recently acknowledged that no final decision had yet been taken on the future of the five-bank merger.
Bank administrators reportedly sought urgent guidance from the governor during a recent meeting, asking whether the government intended to maintain the unified banking structure or permit former owners to return. However, no immediate direction was provided.
The uncertainty has paralysed major reform initiatives within the bank.
Key restructuring measures - including closure of unprofitable branches, operational consolidation and implementation of a unified core banking system - have largely stalled despite earlier directives from Bangladesh Bank.
Administrators say they are continuing only routine banking operations under instructions issued during the interim government period and are unable to take major policy decisions without fresh government approval.
Meanwhile, former owners have intensified efforts to regain control.
Former Social Islami Bank chairman Dr. Md. Rezaul Haque said his group had already applied under the revised resolution framework and secured a favourable court ruling. He expressed hope that the bank would soon be allowed to resume independent operations.
Former EXIM Bank chairman Nazrul Islam Swapan also confirmed submitting a formal application seeking restoration of control and requested a meeting with the central bank governor.
Recently, former directors and founders of both banks formally proposed three recovery options to the central bank: restoring independent operations, strengthening Bangladesh Bank oversight, or replacing the administrator-led system with a board-managed structure.
According to them, these measures would help restore stability while protecting depositors.
However, critics warn that any move to return troubled banks to former ownership could reignite public distrust and undermine the original purpose of the merger initiative.
The merged banks had long faced allegations of financial mismanagement, political influence and governance failures during the previous Sheikh Hasina administration.
EXIM Bank was widely reported to have been controlled by former Bangladesh Association of Banks chairman Nazrul Islam Majumder, while the other four banks were linked to controversial Chattogram-based businessman S Alam.
Bangladesh Bank spokesperson Arif Hossain insisted that Sammilito Islami Bank would continue operating in its current form, as no new government decision had yet been announced regarding the merger.
But depositors remain deeply anxious.
"I felt hopeful after hearing about the merger," said depositor Sharif Hossain. "Now hearing about the possible return of the previous owners has made us worried again. We only want our deposits to remain safe."
