No alternative but to complete Sammilito Islami Bank merger quickly: BB governor

As part of ongoing reforms in the banking sector, there is no alternative to completing the merger of five struggling Shariah-based banks into Sammilito Islami Bank PLC as quickly as possible, said Bangladesh Bank Governor Mostaqur Rahman today (16 March).

The governor’s remarks came during a meeting with the administrators of the five banks at the central bank headquarters, where he instructed them to expedite the merger process, including the integration of the banks’ IT systems.

According to sources, the meeting was attended by the administrators of the five banks and four supporting officials assigned to each of them.

During the discussion, the governor asked why the IT integration process was taking time, to which officials explained that merging the banks’ separate data systems was taking the additional time.

At one point, an official asked whether the merger process would continue. In response, Mostaqur said the government had already injected Tk20,000 crore in capital into the new bank, while Tk12,000 crore was being provided to depositors from the Deposit Insurance Trust Fund.

He said the entire process must therefore be completed as soon as possible, adding that there is no scope to backtrack from the merger.

Earlier, on 3 March, the governor held another meeting with the administrators of Sammilito Islami Bank. At that meeting, he assured them that steps would be taken soon to appoint a managing director for the new bank and asked administrators to continue their duties in accordance with regulations.

He also instructed officials to strengthen loan recovery efforts and to take initiatives to restart factories financed by the five banks if they had become inactive.

The five banks merged to form Sammilito Islami Bank are EXIM Bank PLC, Social Islami Bank PLC, First Security Islami Bank PLC, Global Islami Bank PLC and Union Bank PLC.

Bangladesh Bank formally appointed administrators in November last year to oversee the merger process, including integration of the banks’ operations and IT systems. Each bank has one administrator and four supporting officials, all of whom are from the central bank.