The Bangladesh Bank (BB) will not change its decision about paying no profits on deposits for 2024 and 2025 at five shariah-based banks now undergoing a merger, even as depositors staged protests at a number of branches.
The central bank confirmed this yesterday as the move aligns with shariah principles, under which no profit is distributed when banks incur losses, said BB officials.
Last week, BB instructed five merging lenders to recalculate their deposit balances and refrain from providing any profit for 2024 and 2025.
The banks -- First Security Islami, Social Islami, Union, Global Islami, and EXIM -- are being merged to form a new state-run institution, Sammilito Islami Bank PLC.
After the decision, depositors of the five banks expressed anger, disrupting normal operations at some branches of the commercial lenders.
The banks reported the unrest to BB and requested a reconsideration. Meanwhile, officials from the bank resolution department of BB met with the governor yesterday.
According to an official from the department who wished to remain anonymous, the governor said the decision would not be reversed as it conforms with shariah law.
He added that backing away could jeopardise the merger initiative.
Arief Hossain Khan, executive director and spokesperson for the BB, said the central bank remains firm on its stance.
On January 14, the banking regulator sent letters to the five troubled banks, stating that deposit balances would be recalculated based on positions as of December 28, 2025 and that no profit would be applied to deposits from January 1, 2024, to December 28, 2025.
Previously, it was decided that profits on deposits would be paid at the bank rate, which currently stands at 4 percent.
A day after the directive, BB Governor Ahsan H Mansur, at a press briefing, said that the move follows shariah principles.
“However, depositors will receive their full principal amount,” he said.
BB officials estimated that if implemented, the decision would reduce the banks’ liabilities by Tk 10,000 crore.
At the end of September last year, total deposits of these banks stood at Tk 141,000 crore, while the number of depositors was 75 lakh.
Officials of the merging banks said many depositors have been visiting branches and issuing threats. Some have remained at branches all day, causing operations to grind to a halt, according to letters sent to authorities.
Branch managers reported that customers have taken an “aggressive stance” and, in some locations, “transactions have been suspended”.
A senior official of Social Islami Bank told The Daily Star that if the decision is implemented, it will be “very difficult to handle customers”.
