BB to withdraw administrators from three more merged banks by Aug 15

 
Bangladesh Bank (BB) has begun the final phase of withdrawing administrators from the banks merged into Sammilito Islami Bank. After removing the administrator from EXIM Bank on July 30 and the central bank withdrew the administrator from Social Islami Bank (SIBL) on Thursday and aims to complete the process for three other merged banks-First Security Islami Bank, Global Islami Bank and Union Bank-by August 15.

The move follows the appointment of the new chairman and managing director of Sammilito Islami Bank, enabling the country's first merged Islamic bank to operate under its own management instead of central bank-appointed administrators.

BB Executive Director and spokesperson Arif Hossain Khan said the administrators were appointed only for the transition period to oversee the merger and coordinate the integration of loans, deposits, branch operations and information technology systems.

Abedur Rahman Sikder was appointed as managing director and CEO for the newly formed Sammilito Islami Bank PLC on 8 June for a three years contract.

"Now that the new management has taken charge, retaining both the administrators and the managing director would create overlapping authority and administrative complications," he said.

Officials said most of the administrative work has already been completed, making it possible to gradually transfer full responsibility to the bank's own management. However, the technical integration of the merged banks is still underway.

The five constituent banks continue to operate separately in many areas as engineers work to integrate core banking software, IT platforms, payment systems and international transaction networks.

Until the integration is completed, some banking services will continue to be provided under the original bank names before eventually being transferred in full to Sammilito Islami Bank.

Chairman Kazi Shairul Hasan described the merger as one of the most challenging restructuring exercises in Bangladesh's banking history. He said the successful completion of the transition is crucial to restoring confidence in the financial sector, warning that any failure could undermine both the banking industry and the broader economy.

He said efforts are continuing to improve liquidity, normalise banking services and rebuild the institution's financial strength with the support of regulators, employees and customers.

The five troubled Islamic banks were brought together after years of severe governance failures and liquidity shortages. Before the merger, EXIM Bank was controlled by former Bangladesh Association of Banks Chairman Nazrul Islam Mazumder, while Social Islami Bank, First Security Islami Bank, Global Islami Bank and Union Bank were under the influence of the S. Alam Group.

Years of loan irregularities, weak corporate governance and declining depositor confidence pushed the banks into deep financial distress, prompting Bangladesh Bank to launch an unprecedented resolution programme.

The merged institution began operations with around Tk 35,000 crore in paid-up capital, including Tk 20,000 crore provided by the government. The remaining Tk 15,000 crore is planned to be converted into equity from eligible depositor funds under the restructuring framework.