Following several weeks of administrative paralysis, the government has moved to regularise the operations of Sammilito Islami Bank by initiating the selection process for its top executive. This development follows a period of uncertainty regarding the governance of the institution, which was formed through a large-scale merger of five distressed Shariah-based banks. The process coincides with significant legislative changes to the Bank Resolution Act 2026, which have sparked internal debate and external scrutiny from international financial institutions.
Background of the Merger
Sammilito Islami Bank was established last year as a corrective measure to address severe liquidity shortages in five commercial banks: Social Islami Bank, First Security Islami Bank, Union Bank, Global Islami Bank, and EXIM Bank. Before the consolidation, the central bank assessed the net asset value (NAV) of the shares in these five entities as zero, officially classifying them as non-viable. To facilitate the merger, the government and regulatory funds created a substantial capital base.
| Financial Component | Value (Tk) | Status/Allocation |
| Government Cash Injection | 100 Billion | Held in Central Bank current account |
| Sukuk Bond Investment | 100 Billion | Invested by the government |
| Deposit Insurance Fund | 150 Billion | Projected contribution |
| Total Paid-up Capital | 350 Billion | Largest in the banking sector |
Executive Recruitment and Legislative Changes
The Ministry of Finance has directed the central bank to conduct interviews for the position of Managing Director. Over a two-day period (Thursday and Sunday), a panel interviewed 10 potential candidates. This move is seen as a vital step in transitioning the bank from a transitional entity to a functional commercial institution.
However, the operational progress is complicated by Section 18(Ka) of the Bank Resolution Act 2026, passed on 11 April. This amendment provides a framework for former shareholders to regain conditional control of restructured banks. Specifically, it allows former owners to re-acquire their stakes by paying an initial 7.5% of the capital injected by the government, with the remaining 92.5% to be repaid over a two-year period at a 10% simple interest rate.
International and Regulatory Implications
The shift in ownership policy has drawn concern from development partners, notably the International Monetary Fund (IMF) and the World Bank. These organisations had previously supported the Bank Resolution Ordinance 2025, promulgated by the preceding interim government, which focused on more stringent financial reforms.
The prospect of returning ownership to groups previously associated with the banks’ financial decline has resulted in a delay in the release of IMF credit tranches valued at US$1.3 billion. International lenders remain cautious about the potential for representatives of former shareholders to regain control through the new legal provisions. Despite these geopolitical and regulatory tensions, the commencement of leadership recruitment indicates that the government intends to proceed with the bank’s operational rollout.