Sammilito Islami Bank Begins Managing Director Recruitment

Following a prolonged period of operational stagnation, the government has initiated the recruitment process for the position of Managing Director at Sammilito Islami Bank. This move signals a renewal of activity for the institution, which currently stands as the largest bank in the country in terms of paid-up capital. The recruitment comes amidst significant legislative debate regarding the Bank Resolution Act 2026 and its implications for the bank’s future ownership and governance.

Formation and Capital Structure

Sammilito Islami Bank was established through the merger of five Shariah-based commercial banks that were facing severe liquidity crises. On 5 November last year, the central bank declared the Net Asset Value (NAV) of these five institutions to be zero, officially classifying them as non-viable due to deeply negative capital positions. Although these banks remain listed on the stock exchange, the Bangladesh Securities and Exchange Commission (BSEC) has suspended the trading of their shares.

To stabilise the newly formed entity, a substantial capital base was established through government intervention and insurance funds.

Recruitment and Legislative Controversy

The recruitment process for the Managing Director is being handled by Bangladesh Bank under the direction of the Ministry of Finance. According to a central bank official, ten candidates were interviewed over a two-day period, specifically last Thursday and Sunday. The final list of candidates is managed by the Ministry of Finance, which maintains ownership of the bank.

The operational progress is occurring alongside a controversial amendment to the Bank Resolution Act 2026. Passed by Parliament on 11 April, Section 18(Ka) of the Act permits former shareholders of troubled banks to regain conditional control. Under this revised law, former owners can initiate a takeover by paying 7.5% of the funds injected by the government. The remaining 92.5% must be settled within two years, carrying a 10% simple interest rate.

International Regulatory Concerns

The legislative shift has attracted scrutiny from international development partners, including the International Monetary Fund (IMF) and the World Bank. The previous interim administration, led by Muhammad Yunus, had introduced the Bank Resolution Ordinance 2025 as part of a reform package recommended by these global lenders.

Officials suggest that the move by the newly elected government to allow former shareholders—some of whom are accused of financial irregularities—to regain control has led to friction with international partners. Consequently, the release of two IMF loan tranches totalling US$1.3 billion, part of a broader US$5.5 billion credit package, has been delayed as the government navigates these ownership restoration steps. Despite these challenges, the commencement of the recruitment process marks the end of a two-month stalemate in the bank’s merger proceedings.