Government Seeking Strategic Partner in Muslim Countries for Sammilito Islami Bank

Abul Kashem, Dhaka — The government is approaching Muslim-majority countries and Islamic institutions to find a strategic partner for Sammilito Islami Bank, formed by merging five troubled private banks plagued by irregularities and corruption during the Awami League government — a strategic move to bring foreign Islamic finance expertise and capital into Bangladesh's largest state-owned Shariah-compliant commercial bank.

Qatar has already been approached to invest in the state-owned bank. During his recent visit to Qatar, Prime Minister's Adviser on Finance and Planning Rashed Al Mahmud Titumir formally proposed that the country become a strategic partner of Sammilito Islami Bank.

🏛 Strategic Partner Search

"We have already proposed that Qatar become a strategic partner. Discussions were held there, but nothing has been finalised yet," Titumir told The Business Standard.

"Further discussions will take place with Qatar, and we will also approach other Muslim countries and organisations to become strategic partners of Sammilito Islami Bank," he said.

Titumir said the government had cancelled its earlier decision to impose a "haircut" on depositors and decided to repay their deposits in full. "There are two ways to repay depositors — providing money from the treasury or bringing a foreign country or organisation into the bank's ownership as a strategic partner," he said. "The government is therefore seeking strategic investors from Muslim countries."

💰 What a Strategic Partner Brings

A strategic partner in a bank typically:

• 💰 Contributes to long-term growth through capital and expertise
• 💻 Supports technology upgrades and digital transformation
• 🏗 Drives business expansion into new market segments
• 👥 Plays active role in management and decision-making
• 💰 Strengthens capital base through substantial long-term funding or equity investment
• 🛡️ Provides financial support during crises

The strategic partner search reflects the government's preference for bringing in Islamic finance expertise from established Shariah-compliant financial markets rather than relying solely on domestic treasury funding for the bank's restructuring.

💰 Sammilito Islami Bank Status

Sammilito Islami Bank was formed by merging five troubled private banks:

• 🏛 First Security Islami Bank (S Alam-controlled)
• 🏛 Social Islami Bank (S Alam-controlled)
• 🏛 Global Islami Bank (S Alam-controlled)
• 🏛 Union Bank (S Alam-controlled)
• 🏛 Exim Bank (controlled by Nazrul Islam Mazumder, considered close to Awami League)

The five banks had struggled to return depositors' money amid severe financial distress. The interim government subsequently merged them into a single state-owned bank under the Bank Resolution Ordinance 2025.

📊 Sammilito Bank Financial Position

According to Bangladesh Bank data, the merged banks have:

• 👥 76 lakh depositors
• 💰 Total deposits: Tk 1,42,000 crore
• 💰 Individual savings account deposits: Tk 15,000 crore
• 💰 Total loans: Tk 1,92,000 crore
• 📉 NPL ratio: ~86 percent classified as non-performing
• 📉 Capital shortfall: exceeds Tk 150,000 crore

🏛 Capital Structure

The state-owned Sammilito Islami Bank began operations in November 2025:

• 💰 Authorised capital: Tk 40,000 crore
• 💰 Paid-up capital: Tk 35,000 crore
• 💰 Government contribution: Tk 20,000 crore (of paid-up capital)
• 💰 Depositor shares: Tk 15,000 crore (to be issued as shares to depositors)

💰 Depositor Withdrawal Update: September 7

The Banking Regulation Department of Bangladesh Bank in a circular on 31 August 2026 said customers of Sammilito Islami Bank can withdraw the full amount held in their fixed deposit receipts (FDRs) at once, but they will not receive any profit if they do so. Key features:

• 💰 FDR account holders: can withdraw full amount at once — but no profit
• 💰 FDR profit condition: must remain under Bank Resolution Scheme to receive profits
• 💰 Current and savings accounts: can withdraw principal in full + applicable profit
• 📅 September 7: bank begins returning principal deposits of individual customers
• 📅 Applications start: from 1 September 2026

Sammilito Islami Bank is set to begin returning the principal deposits of individual customers from 7 September. Initially, customers will be allowed to withdraw or encash their entire principal amount in a single transaction. However, they will not receive any profit in this case.

🏛 Operational Resumption Timeline

According to Bangladesh Bank's announcement, normal transactions for individual customers were scheduled to resume from 1 September. However, several days are needed to complete preparations:

• 📜 Sending cash requisitions to branches and sub-branches
• 📜 Ensuring supply of cash from Bangladesh Bank
• 📜 Establishing secure cash-management arrangements

As a result, the bank has decided to begin the full-scale return of depositors' funds from 7 September 2026 — providing the operational runway needed for orderly payouts.

🌏 Strategic Implications

The strategic partner search carries several strategic implications for Bangladesh's banking sector:

• ✅ Foreign Islamic finance expertise: brings established Shariah banking practices
• ✅ Capital injection: reduces treasury burden for depositor repayment
• ✅ International credibility: foreign strategic partner signals confidence in Bangladeshi banking reform
• ✅ Governance improvement: strategic partner brings management discipline
• ✅ Technology transfer: modern banking technology from established Islamic finance markets
• ⚠️ Negotiation complexity: sovereign-level discussions time-consuming
• ⚠️ Capital shortfall magnitude: Tk 150,000 crore gap is substantial
• ⚠️ NPL recovery challenge: 86% NPL ratio requires resolution expertise

🌏 Qatar Engagement Significance

The choice of Qatar as the first country approached reflects several strategic considerations:

• 🇶🇦 Qatar Islamic Bank (QIB): established Shariah-compliant banking expertise
• 🇶🇦 Qatar Investment Authority (QIA): substantial sovereign wealth fund capacity
• 🇶🇦 Qatar-Bangladesh relations: existing labour migration corridor
• 🇶🇦 Islamic Development Bank connection: Qatar active in IsDB
• 🇶🇦 Geopolitical alignment: Bangladesh's broader Middle East engagement

If Qatar (or another Muslim-majority country strategic partner) agrees to invest in Sammilito Islami Bank, it would represent one of the largest single foreign direct investments in Bangladesh's banking sector — bringing not only capital but also the institutional credibility and operational expertise needed to stabilise the country's largest state-owned Shariah-compliant commercial bank through the LDC graduation transition period beginning November 2026.