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Depositors of Sammilito Islami Bank PLC will not face any “haircut” on their deposits. From September 1, individual depositors will be able to withdraw the principal amount of their deposits according to their needs.
The decision was announced on Tuesday following a meeting between Bangladesh Bank Governor Md Mostaqur Rahman and Sammilito Islami Bank Chairman Kazi Shairul Hasan and Managing Director Abedur Rahman Sikder. Deputy Governors Md Habibur Rahman, Md Kabir Ahmad, Md Sarwar Hossain and Md Anisur Rahman were also present. Bangladesh Bank disclosed the information in a press release.
During the meeting, the governor said that although the finance minister had announced in Parliament that there would be no haircut on depositors’ profits, some confusion remained among depositors. He therefore instructed the bank to clearly inform all depositors that no haircut would be imposed on their profits.
Meanwhile, deposits are already being returned to customers in accordance with the scheme announced on December 29 last year. From September 1, individual depositors will also be able to withdraw the principal amounts from Al-Wadiah current accounts, Mudaraba savings accounts and Mudaraba term deposits according to their requirements. Sammilito Islami Bank has been instructed to take the necessary measures to facilitate the withdrawals.
On January 14 this year, Bangladesh Bank decided to impose a haircut on the profits of depositors of the five merged banks. In a letter sent to the administrators of the five banks, the central bank said depositors would not receive profits on their balances for 2024 and 2025.
Bangladesh Bank had taken the decision to apply a two-year profit haircut in line with international practices. As a result, a portion of depositors’ returns was withheld under the haircut arrangement.
According to the central bank’s statement, Sammilito Islami Bank PLC was established with capital of around Tk35,000 crore, making it the country’s largest and only government-owned Islamic bank. The bank has been instructed to take necessary steps to restore its operations to normal as quickly as possible.
As a result, officials expect the scope of normal banking transactions for individual depositors to expand further from September 1.
Although such practices exist in various countries around the world, depositors had protested against the decision from the outset. The rule has finally been withdrawn.