Deposit Recovery for Failed Islamic Banks in Bangladesh
Bangladesh Bank Governor Ahsan H. Mansoor announced today that depositors from five failed Islamic banks will have their funds returned within the next two years.
During a press conference regarding San Morito Islamic Bank, he explained that the decision to reimburse depositors was made with the guidance of the Shariah Council, emphasizing that their interests are a priority.
He mentioned that the approach for repaying deposits strictly aligns with Shariah guidelines.
Mansoor clarified that the government will not only return the principal amounts. “By 2024, investment gains and interests that have been recorded will also be distributed to depositors,” he stated.
He noted that for those who have kept their money in these banks for an extended period, say ten years, they would receive the entire principal along with the accrued returns for that time.
Furthermore, he highlighted: “The goal was to fully compensate depositors, even if their investments had been poorly managed or not made at all due to past management failures.”
Mansoor pointed out that while typically, Islamic banking principles require partners to share losses from genuine investments, the losses in this case will not fall on depositors. Instead, the government has taken responsibility for those losses.
He remarked that even though the revised financial results for the fiscal year 2024-25 indicate substantial losses for these banks, depositors are not bearing any past or present financial burdens.
“There are limitations within Islamic Sharia principles, so not every potential benefit can be offered. Nevertheless, both the actual deposits and recorded profits will be compensated,” he added.
The governor also mentioned that there had been some disruptions caused by a few individuals at branches, particularly at Union Bank, but fortunately, no major harm occurred. He advised depositors to stay calm and not be swayed by such incidents.
Finally, Mansoor reassured the public that with the appointment of new management, there would be no restrictions on withdrawals, particularly for deposits made after the start of this month. Depositors will be able to withdraw their funds as needed and earn returns based on market interest rates.
