Thousands of Investors Wiped Out Overnight: Bangladesh Bank Launches Sammilito Islami Bank Amid Controversy
In a move that has sparked both hope and outrage, Bangladesh Bank has officially unveiled the logo of Sammilito Islami Bank PLC, a new entity born from the ashes of five struggling Shariah-compliant banks. But here's where it gets controversial: the merger process, while aiming to restore financial stability, has left thousands of small shareholders empty-handed, their investments completely erased.
The logo, revealed on December 30th, proudly displays the slogan "Sammilito Shaktite Samriddha Agami" (A prosperous future through collective strength), symbolizing the ambitious goal of this newly formed institution. Sammilito Islami Bank is the result of merging EXIM Bank, First Security Islami Bank, Global Islami Bank, Social Islami Bank, and Union Bank, all of which faced severe financial crises due to long-standing irregularities, liquidity shortages, and a high volume of defaulted loans.
Earlier this month, the central bank executed a drastic measure by reducing the paid-up capital of these banks to zero, effectively wiping out the entire shareholding of investors. Under the Capital Reduction Order issued by the Bank Resolution Department (BRD), all paid-up capital was written down, and issued shares were fully cancelled. This means shareholders have lost all ownership rights, including voting power, dividend entitlements, and the ability to pursue legal claims.
And this is the part most people miss: While the merger aims to protect depositors and stabilize the financial sector, the lack of compensation for small shareholders has raised ethical and legal questions. Is it fair to sacrifice individual investors for the greater good? This decision has ignited debates about the balance between financial stability and investor protection.
Bangladesh Bank has also finalized the Bank Resolution Scheme, 2025, outlining a phased plan to return depositors' funds. The scheme, prepared under the central bank's supervision, seeks to restore confidence in the banking system after the collapse of the five banks' normal operations.
Sammilito Islami Bank commenced full banking operations on December 2nd, following the issuance of its final license. It is now the largest state-owned Islamic bank in Bangladesh, with a mandate to safeguard depositors and restore financial stability. The merger was officially approved at a special board meeting on November 30th, chaired by Governor Ahsan H Mansur, and the license was formally handed over on December 1st.
The new bank boasts a paid-up capital of Tk35,000 crore, with Tk20,000 crore contributed by the government and Tk15,000 crore to be raised by converting deposits into shares. Its authorized capital is set at Tk40,000 crore. Mohammad Ayub Miah has been appointed as chairman, and the bank's head office is located at Sena Kalyan Bhaban in Motijheel, Dhaka. Other board members include Hafiz Ahmed Chowdhury, M Saifullah Panna, Md Kamal Uddin, Md Shahriar Kader Siddiky, Md Rashedul Amin, and Sheikh Farid.
But here's the burning question: As Sammilito Islami Bank embarks on its journey, will it truly deliver on its promise of a prosperous future, or will the scars of the merger process linger? What do you think—was this a necessary sacrifice for financial stability, or a betrayal of small investors? Share your thoughts in the comments below!
