Bangladesh Bank is moving to bring strategic foreign investors into Sammilito Islami Bank, a new shariah-based lender formed by merging five troubled Islamic banks, and this decision aims to restore trust and strengthen Islamic finance in the country. The central bank has given preliminary approval for the merger and appointed administrators to manage the process, while a large public capital injection will provide strong liquidity and a high starting capital base. The merged bank will begin its operations with paid-up capital of Tk 35,000 crore, a level the central bank says can make it one of the strongest institutions in the sector. Officials expect that the heavy capital and better governance can allow the bank to return to profit early, possibly in its first year, by stabilising deposits and renewing lending activity. Because the five banks had negative net asset values, their existing shareholders will not receive payment under the merger plan, and this step is meant to protect depositors and the wider financial system. The central bank governor said the merger is part of a wider effort to repair damage that hit Islamic banking over recent years and to encourage standards of transparency and good governance. He urged the new bank and the whole sector to follow global best practices and to expand the range of services to include Islamic insurance, non-bank Islamic financing and digital banking platforms. Industry leaders also noted the need to protect the value-based principles that define sharia banking, warning that any compromise on core values would harm trust. They pointed out that global Islamic finance already manages trillions of dollars and that sukuk, capital markets and asset management are clear growth areas that Bangladesh can tap. The merger offers a chance to build stronger systems for risk control, compliance and customer protection while attracting foreign partners who can bring capital, technology and new products. Administrators and regulators will focus on clear rules, staff training and better risk checks so the merged bank can meet its promises to depositors and customers. Rebuilding trust will take time, but the plan to invite strategic international investors and later consider an initial public offering aims to create long term ownership that supports steady growth. If governance improves and services expand, depositors may return and new business can follow, helping the Islamic banking sector grow in a safer and more modern way. Many in the industry are hopeful that this path will lead to cleaner balance sheets, more innovative Islamic products and a stronger role for the sector in the national economy. Combined public support, private investment and clearer rules could deepen local capital markets and expand safe savings and finance options for households and firms in meaningful ways.
