Sammilito Islami Bank Files 10,000 Cases to Recover Defaulted Loans from Five Merged Lenders

Star Business Report, Dhaka — Sammilito Islami Bank PLC, the consolidated Islamic banking entity formed by merging five troubled shariah-based lenders in November 2025, has filed nearly 10,000 lawsuits to recover defaulted loans — an unprecedented legal drive in Bangladesh's banking history that signals the central bank's determination to claw back stuck funds and protect depositors' interests at the country's largest state-owned shariah-based commercial bank.

The figure was confirmed in a Bangladesh Bank statement issued after a high-level review meeting held on 27 August 2026 between central bank Governor Md Mostaqur Rahman, the Bank Resolution Department (BRD), and senior officials overseeing the merged bank's restructuring. More cases are being prepared, Bangladesh Bank assistant spokesperson Shahriar Siddiqui confirmed.

⚖️ Multiple Recovery Tracks

The bank is pursuing loan recovery through multiple parallel tracks:

• ⚖️ Conventional litigation: ~10,000 cases filed in money loan courts across Bangladesh
• 🤝 Exit Policy: Bangladesh Bank's negotiated exit mechanism for distressed borrowers
• 💬 Alternative Dispute Resolution (ADR): mediation-based dispute settlement to avoid lengthy court processes
• 🔍 Forensic audit: comprehensive investigation nearing completion targeting individuals responsible for irregularities, corruption, loan fraud and asset misappropriation under previous ownership

🏛 The Five Bank Merger

Sammilito Islami Bank was formed in November 2025 by merging five troubled Islamic banks under the Bank Resolution Ordinance 2025:

• 🏢 First Security Islami Bank
• 🏢 EXIM Bank
• 🏢 Social Islami Bank
• 🏢 Global Islami Bank
• 🏢 Union Bank

The consolidated entity began operations as the country's largest state-owned shariah-based commercial bank with a paid-up capital of Tk 35,000 crore, including Tk 20,000 crore from the state coffers and Tk 15,000 crore from depositors. The merger was triggered by systemic governance failures and large-scale loan defaults that had pushed the five banks into insolvency under their previous ownership structures.

👥 Workforce and Branch Integration

Bangladesh Bank said several major steps have been taken over the past six months to restructure Sammilito Islami Bank:

• 👥 16,000 officers and employees across the five merged entities have had their ranks, responsibilities and organisational structures rationalised
• 🏢 Board reconstituted with greater representation of independent directors
• 👑 Chief Executive Officer appointed on 16 July 2026
• 🏢 780 branches and 1,500 business units undergoing rationalisation and operational integration

💻 IT Integration Milestones

Work is underway to integrate the IT infrastructure of the five banks under a single framework:

• 💻 Core Banking System integration
• 🌐 SWIFT messaging platform consolidation
• 📞 RMA (Relationship Management Application) integration
• 💡 Common interface allowing depositors to withdraw money from any branch of the five banks — completed

The common interface deployment is particularly significant for depositors, who have, since the merger announcement, faced uncertainty about accessing their funds across the legacy branch networks of the five predecessor banks. The BB said the rationalisation and operational integration of the 780 branches and 1,500 business units are underway, taking into account branch locations, business potential, customer service and operating costs.

💰 Depositor Access Update

The latest disclosure on the loan recovery drive comes two days after Bangladesh Bank announced that Sammilito Islami Bank would allow individual depositors to withdraw their principal amounts from certain deposit accounts as needed from 1 September 2026. The central bank confirmed there would be no haircut on depositors' profits — a critical reassurance that has calmed depositor anxiety around the merger process.

The phased relaxation of deposit access — combined with the aggressive legal recovery drive — represents a coordinated twin-track strategy by Bangladesh Bank: on one hand, restoring depositor confidence by ensuring access to funds; on the other, intensifying legal pressure on defaulting borrowers and previous bank officials responsible for the irregularities that triggered the merger in the first place.

📊 Strategic Significance for Bangladesh Banking

The Sammilito Islami Bank restructuring is being closely watched as the test case for Bangladesh Bank's broader banking sector reform agenda, which Commerce Minister Khosru has positioned as a multi-year structural cleanup following the political transition. Key implications include:

• 💰 Recovery benchmark: the 10,000-case volume establishes a recovery template that could be replicated for other distressed banks
• 👥 Workforce model: the rationalisation of 16,000 employees provides a reference framework for future banking consolidations
• 🔍 Forensic accountability: the audit's findings could lead to criminal proceedings against former bank owners and executives
• 🏛 Shariah banking consolidation: the merger creates a single dominant state-owned Islamic banking platform, reshaping competitive dynamics in the Shariah-compliant finance segment

The Bank Resolution Department is conducting regular follow-up assessments and monitoring progress on loan recovery, case disposal, human resource management, branch and business unit integration, and technological integration. Bangladesh Bank expects the measures to strengthen governance and operational efficiency, accelerate loan recovery, reduce operating costs and help channel recovered funds back into productive sectors — marking the most ambitious state-led banking sector clean-up in Bangladesh's history.