Government Seeks Foreign Investment for Sammilita Islami Bank

The government is actively seeking foreign and specially Muslim-nation investors, including Qatar, to relinquish state ownership in the newly formed Sammilita Islami Bank. This significant development regarding the ownership structure of the financial institution was disclosed yesterday, Monday, at the Ministry of Finance located in Dhaka.

Sammilita Islami Bank was established through the consolidation of five weak Shariah-based financial institutions: Exim Bank, Social Islami Bank, First Security Islami Bank, Global Islami Bank, and Union Bank. The process of forming this consolidated entity moved forward when Bangladesh Bank issued a consent letter on November 9 of last year, followed by the granting of a final operating license on November 30.

The financial framework of the newly established bank features an authorized capital of 40 billion taka, alongside a paid-up capital totaling 35 billion taka. Out of this paid-up capital, the government has directly provided 20 billion taka, while the remaining 15 billion taka is scheduled to be incorporated into the capital through the conversion of depositors' funds into shares.

Operational scale data indicates that the institution possesses a vast network comprising 761 branches, 698 sub-branches, 511 agent banking outlets, and 975 ATM booths. The total workforce stands at 18,811 employees, distributed across the formerly independent institutions with First Security Islami Bank employing 5,996 workers, Social Islami Bank having 4,039 workers, Exim Bank with 3,487 workers, Global Islami Bank accounting for 2,486 workers, and Union Bank maintaining 2,073 workers.

Despite its extensive infrastructure, the institution faces severe financial hurdles inherited from the merged entities. Data recorded through March shows that the combined non-performing loans of the five constituent banks reached an alarming 165,779 crore taka, which translates to a non-performing loan ratio of 84.22 percent.

Addressing these developments at the Ministry of Finance in Dhaka, Rashed Al Mahmud Titumir stated that the government intends to step away from the ownership of Sammilita Islami Bank. He noted that preliminary discussions have already been initiated with Qatar, and if these diplomatic and financial talks prove successful, Qatar will be positioned to join the ownership structure of the bank. Regarding the future direction of the institution, Titumir remarked that the ultimate decisions will depend entirely on those individuals who take over the responsibilities of managing the bank, adding that the government cannot know about such matters in advance.