Bangladesh Bank on Sunday granted initial approval and issued a letter of intent (LOI) to the government for the formation of Sammilito Islami Bank PLC, a new state-owned bank created through the merger of five troubled Shariah-based banks.
Officials said that the approval was given following a request from the Ministry of Finance.
A virtual special board meeting held on Sunday approved the LOI for the new bank, officials said.
The new entity will combine First Security Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank, and EXIM Bank, all of which were recently placed under central bank resolution process due to severe financial distress.
The government has already formed a seven-member board for the new bank, with Nazma Mobarek, secretary of the FID, serving as chairperson.
Other board members include Md Khairuzzaman Mozumder, secretary of the finance division; M. Saifullah Panna, secretary of the Chief Adviser鈥檚 Office; Md Kamal Uddin, secretary of the ministry of religious affairs; Md Shahriar Kader Siddiky, secretary of the economic relations division; Rashedul Amin, joint secretary of the finance division; and Sheikh Farid, joint secretary of the FID.
The tenure of the newly formed board may last for a maximum of six months to one year.
Later, BB will appoint a chairman and a managing director from among experienced professionals in the banking industry, and the bank will then operate independently, the official added.
After receiving the LOI, the government will proceed to register the new bank with the Registrar of Joint Stock Companies and Firms (RJSC).
Bangladesh Bank has attached several conditions in line with the Bank Company Act and other regulatory requirements, which must be fulfilled before a final operating license is granted.
The merged bank will have a paid-up capital of Tk 35,000 crore and an authorised capital of Tk 40,000 crore, making it the largest bank in the country by capital base.
The new bank will initially operate under government ownership before being gradually transferred to the private sector once it stabilises and a strategic partner is chosen, likely within two years.
On November 5, Bangladesh Bank formally declared the five Islamic banks 鈥榥on-viable鈥� under the Bank Resolution Ordinance 2025, after appointing administrators to each of them.
Governor Ahsan H Mansur at a press conference on the day said that the administrators were tasked with maintaining daily operations, ensuring payment of remittances and import bills, consolidating IT systems, and rationalising staff and branches to avoid duplication.
He assured depositors that their funds remain safe under state ownership, stressing that the restructuring aimed to restore public confidence and discipline in the financial sector.
However, shareholders鈥攂oth sponsors and general investors鈥攚ill not receive compensation since all five banks had negative net asset values, with losses ranging from Tk 75 to Tk 450 per Tk 10 share.
The Sammilito Islami Bank will operate as a full-fledged commercial bank under Shariah principles but with tighter central bank oversight to ensure compliance, transparency, and long-term stability.