Refund Process Begins for Five Merged Islamic Banks

Dhaka – Depositors of five financially troubled Islamic banks, recently merged to form the United Islamic Bank, will begin receiving refunds from next week. Initially, under the deposit insurance scheme, customers will be able to withdraw up to BDT 200,000 in a single transaction.

A senior official from Bangladesh Bank confirmed the plan on Thursday, assuring that procedural hurdles have been removed and withdrawals will commence on Monday or Tuesday of next week from the respective bank branches.

Banks Involved in the Merger

The five banks that have been consolidated into the United Islamic Bank are:

EXIM Bank

Social Islami Bank

First Security Islami Bank

Global Islami Bank

Union Bank

Withdrawal Guidelines

Customers with BDT 200,000 or less in their accounts can withdraw the entire amount at once under the insurance scheme.

Those with balances exceeding BDT 200,000 will be allowed to withdraw up to BDT 100,000 every three months, for a maximum period of two years.

Special provisions have been made for depositors over 60 years old and those suffering from cancer or serious illnesses, allowing them to withdraw any required amount immediately.

If a depositor holds multiple accounts in the same bank, withdrawals will be allowed from only one account. However, customers with accounts in different banks can withdraw the permitted amount from each bank separately.

Background of the Crisis

According to Bangladesh Bank, during the previous government’s tenure, several influential groups allegedly obtained massive fraudulent loans from over a dozen banks. Mismanagement and irregularities gradually led these banks into deep financial trouble, prompting the central bank to merge the five Islamic banks.

Capital and Structure of the New Bank

Deposits and Loans

Plans are in place to consolidate multiple branches in the same area to one or two locations to reduce costs. Staff salaries and allowances have already been cut by 20% as part of the cost-saving measures.

Bangladesh Bank emphasises that the merger and refund scheme aim to restore public confidence in the banking sector while ensuring depositors recover their funds in a structured manner.