Bangladesh Bank Finalizes Deposit Repayment Schedule for Five Islamic Banks

Staff Report: PNN

To protect the interests of general depositors, Bangladesh Bank has finalized the deposit repayment schedule and management structure for five Islamic banks. The central bank issued a notification on Tuesday (30 December) outlining the details of this scheme.

Depositors with up to 2 lakh Taka in deposits will have their funds fully protected and may withdraw their money at any time under the ‘Deposit Protection Act.’ Withdrawal will be available from the next working day after consolidation.

Deposits exceeding 2 lakh Taka will be disbursed in installments. Excess funds in current and savings accounts may be withdrawn in multiple stages over a maximum period of 24 months. In the first phase, 1 lakh Taka can be withdrawn three months after the scheme’s implementation, followed by subsequent installments at 6, 9, 12, 15, 18, and 21 months. The remaining balance will be payable at the end of 24 months. Institutional depositors will follow the same schedule.

Special humanitarian provisions have been made for seriously ill depositors. Individuals suffering from cancer, kidney dialysis, or other serious illnesses can withdraw funds outside the prescribed limits and schedules for medical needs.

Additionally, the consolidation process of the five banks into a new entity, “United Islamic Bank,” has been finalized. The new bank will incorporate First Security Islamic Bank, Social Islami Bank, Union Bank, Global Islami Bank, and Exim Bank. The new bank’s logo has already been unveiled.

For term and fixed deposits, the notification provides detailed guidance. General depositors may receive up to 20% of investment or loan benefits against their fixed deposits. Three-month term deposits will automatically renew three times after activation. One- to two-year deposits may be converted into three-year deposits, two- to three-year deposits into four-year deposits, and three- to four-year deposits into five-year deposits. Deposits longer than four years will be payable at maturity.

The new bank will initially have a seven-member Board of Directors, with at least half of the members being independent directors. Bangladesh Bank stated that this scheme aims to restore depositor confidence and bring stability back to the banking sector.