BB Draws Red Line on Deposits: No Haircut at Sammilito Islami Bank

Bangladesh Bank has ordered Sammilito Islami Bank to give depositors an unequivocal assurance that no “haircut” will be imposed on their deposits or profits, seeking to dispel growing uncertainty among customers of the newly formed lender.

Bangladesh Bank Governor Mostaqur Rahman issued the instruction during a meeting with Sammilito Islami Bank Chairman Quazi Shairul Hassan and Managing Director Abedur Rahman Sikder at the central bank on Tuesday. 

The meeting was also attended by Bangladesh Bank Deputy Governors Habibur Rahman, Kabir Ahmed, Sarwar Hossain and Anis Ur Rahman.

The governor directed the bank’s top management to take all necessary measures to restore “normal” banking operations at the earliest, according to people familiar with the meeting.
Governor said money is already being returned to depositors in line with the scheme announced on December 29, 2025.

He further directed the bank to take necessary measures so that, from next Tuesday (September 1), individual depositors can withdraw money from Al-Wadiah current accounts, Mudaraba savings accounts and Mudaraba term deposits, according to their requirements, beyond the provisions of the original scheme where necessary.

The directive comes against the backdrop of concerns among depositors over whether they could face deductions from their deposits or profits as the authorities work to rehabilitate the troubled banks merged into Sammilito Islami Bank.

The central bank has asked the lender to communicate clearly to every depositor that their entitled deposits and profits will not be reduced or deducted under the resolution process.

The assurance follows a commitment made by Finance Minister Amir Khosru Mahmud Chowdhury in Parliament last month that depositors of banks burdened with large volumes of defaulted loans would ultimately receive their full deposits along with interest.

The minister said the Depositor Protection Act 2026 had raised the maximum protected deposit from Tk 100,000 to Tk 200,000.

Depositors of banks undergoing resolution were gradually receiving their money back, he said, adding that depositors of finance companies had previously not been covered by the protection law.

Despite the government’s assurances, uncertainty persisted among some account holders, particularly over the possibility of a haircut under the restructuring process.

The latest instruction from Bangladesh Bank is therefore intended to remove that ambiguity, with Sammilito Islami Bank being asked to make it explicitly clear that depositors will not suffer a reduction in their entitled money or profits.

Sammilito Islami Bank formally began operations on August 16 following the merger of five Shariah-based lenders - Exim Bank, First Security Islami Bank, Global Islami Bank, Union Bank and Social Islami Bank.

The merger created a banking giant with a nationwide network inherited from the five institutions, comprising 760 branches, 698 sub-branches, 511 agent banking outlets and 975 ATM booths.

The scale of the challenge facing the new bank is enormous. Bangladesh Bank data show that the five merged banks had combined defaulted loans of Tk 1.66 trillion at the end of March, representing a staggering 84.22% of their total loans.

Sammilito Islami Bank started operations with Tk 350 billion in authorised capital, while the government has already injected Tk 200 billion in capital support.

The central bank’s latest move signals an urgent effort to rebuild depositor confidence in the new institution, as authorities seek to stabilise one of the country’s most troubled segments of the banking sector and prevent fears over deposit security from triggering further withdrawals.