Sammilito Islamic Bank Files 10,000 Cases to Recover Defaulted Loans

 
Sammilito Islamic Bank has launched an aggressive drive to curb corruption, loan fraud and asset misappropriation, filing nearly 10,000 lawsuits to recover defaulted loans, according to bank officials.

The officials said preparations are also underway to file additional cases, while a forensic audit aimed at identifying the key perpetrators behind the scams is in its final stage.

The decision was taken at a high-level review meeting held on Thursday between the Bangladesh Bank governor and officials of the Bank Resolution Department (BRD). 

The meeting reviewed the bank’s six-month operational performance, including the activities of its board of directors and executive management, human resources, branch consolidation and technological integration.

Bangladesh Bank officials said the bank’s restructuring and operational activities are being carried out under the central bank’s direct initiative and supervision. The BRD is regularly monitoring the progress and conducting necessary follow-ups.

Under the central bank’s strict oversight, operations at the country’s largest Shariah-compliant bank are being restored. Measures are also being taken to ensure that depositors and customers can withdraw funds seamlessly from any branch nationwide.

The forensic audit, launched to investigate past allegations of irregularities, corruption, loan fraud and asset misappropriation under the previous ownership and management, is nearing completion. Bangladesh Bank said the audit aims to identify all individuals involved in the financial irregularities.

In addition to legal proceedings, the bank has introduced compromise-based alternatives for faster recovery, including an ‘Exit Policy’ and ‘Alternative Dispute Resolution’ (ADR) mechanisms.

According to central bank data, significant progress has been made over the past six months in restructuring Sammilito Islamic Bank. The board has been reconstituted, with a strong emphasis on independent directors, while a new managing director (MD) and chief executive officer (CEO) was appointed on July 16.

Necessary structural changes to the designations, responsibilities and organisational hierarchy of nearly 16,000 employees have been finalised. To reduce operational costs and improve efficiency, the merger and rationalisation of 780 branches and 1,500 business units have begun.

Work on establishing a powerful ‘Common Interface’ is in its final stage, which will allow customers to withdraw money from any branch of the five merged banks. Meanwhile, the bank’s overall IT infrastructure�"including its Core Banking Software (CBS), SWIFT and RMA systems�"is being integrated into a unified digital ecosystem.