74,000 depositors apply for withdrawal

The number of depositors seeking their money back from Sammilito Islami Bank crossed 74,000 by the end of Sunday out of roughly 84 lakh customers, with total claims possibly reaching more than Tk3925 crore, as the application window closed on Sunday, according to sources.

The clients are of Exim Bank, Social Islami Bank, Union Bank, First Security Islami Bank and Global Islami Bank that these five banks are now merged into Sammilito Islami Bank.

The deadline for applications ended on Sunday, September 6, while the bank is scheduled to start paying depositors from today (Monday).

On first day applied 18,046 depositors for Tk1329 crore, on second day 19,613 for Tk1016 crore, third day 21,086 depositors for Tk923 crore and on the fourth day 15,476 for Tk657 crore.

The bank has been preparing cash at its branches and sub-branches and arranging supplies from Bangladesh Bank before starting the repayment process. 

Depositors will initially be allowed to withdraw their full principal amount in a single transaction.

But there is a catch. Customers who withdraw their entire principal will not receive profit on the amount withdrawn. Those who keep their accounts open will continue to receive profit according to the terms of their existing agreements.

The facility covers deposits in Al-Wadiah current accounts, Mudarabah savings accounts, MTDRs, DPS and other term deposits.

Despite the rush at some branches, the number of people applying for withdrawal remains relatively small compared with the bank's total depositor base.

The five banks merged into Sammilito Islami Bank-EXIM Bank, Social Islami Bank, First Security Islami Bank, Global Islami Bank and Union Bank-together have about 76 lakh to 84 lakh depositors, according to different reports, with deposits of roughly Tk1.42 lakh crore.

That means even an estimated Tk3,925 crore of withdrawal applications would represent less than 3 per cent of the combined deposit base. 

Bank officials have also argued that the relatively limited number of withdrawal applications shows that most customers are choosing to keep their money with the new bank rather than immediately closing their accounts.

Its managing director, Abedur Rahman Sikder, described the number as relatively small and said most customers were continuing their banking relationship.

The withdrawal exercise is only the first step for the new bank. Sammilito Islami Bank was created after the merger of five troubled Islamic banks that had faced severe liquidity problems and allegations of financial irregularities.

The combined banks had around Tk1.92 lakh crore in loans, with reports putting the share of classified or defaulted loans at around 86 per cent.

The new bank has Tk35,000 crore in paid-up capital, including Tk20,000 crore from the government, according to reports.

So, while Monday's cash payments will matter greatly to ordinary depositors, the bigger financial test will be whether the new bank can recover bad loans, strengthen governance and rebuild confidence over the longer term.

For the depositor standing at a branch, however, the issue is much more immediate.

After months of uncertainty, Monday is the day they are supposed to get access to the principal they had already put into the five troubled banks.

The bank's managing director said, "We are trying to restore confidence among our depositors."