Dhaka Electricity Supply Company (Desco) has approached the Bangladesh Bank to recover roughly Tk250 crore trapped in six financially distressed banks, the state-owned electricity distributor confirmed on 11 August.
Desco Managing Director Brigadier General Shamim Ahmed sent a letter to central bank Governor Mostaqur Rahman requesting intervention. The utility needs to encash these deposits to maintain electricity supply and meet financial obligations.
Funds are scattered across Global Islami Bank, Union Bank, Social Islami Bank, First Security Islami Bank, Padma Bank, and Bangladesh Commerce Bank. The four merged lenders hold a combined Tk209.44 crore of Desco’s deposits.
Global Islami Bank holds Tk47.94 crore, Union Bank holds Tk55.27 crore, Social Islami Bank holds Tk59.96 crore, and First Security Islami Bank holds Tk46.27 crore. The four entities, along with Exim Bank, merged last year to form Sammilito Islami Bank.
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Desco also has Tk22.53 crore in Padma Bank and Tk17.36 crore in Bangladesh Commerce Bank. The five merged lenders were previously controlled by controversial businessman Saiful Alam, commonly known as S Alam.
The utility stated that the banks failed to return the deposits after maturity. Desco claims it made repeated written and verbal requests but received no positive response.
Officials at Bangladesh Bank said funds stuck in the five merged banks would be repaid to customers according to applicable rules. However, Padma Bank and Bangladesh Commerce Bank lack the capacity to repay large sums quickly.
Padma Bank remains in severe financial distress, according to the central bank’s Off-site Supervision Department. The bank is grappling with high non-performing loans and a capital shortfall. Nearly 90% of its loans are classified as non-performing.
Bangladesh Commerce Bank is also facing financial difficulties. As of 31 March, 66% of its total loans were classified as non-performing. The bank also had a substantial provision shortfall. Against a required provision of Tk1,004 crore, it had set aside only Tk375 crore.
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Following the merger of the five lenders, the government adopted a repayment policy prioritising small depositors. The central bank has provided funds from the Deposit Protection Fund to help address the banks’ massive non-performing loans and liquidity shortages.
The Deposit Protection Act 2026 sets the maximum protected deposit at Tk2 lakh. Depositors’ claims have been preserved in the new bank under the resolution framework. In July, the finance minister said depositors would eventually receive their principal and interest, though full repayment could take time due to bank losses.
Desco’s predicament highlights a growing problem for large institutions and government entities trying to access their own capital in a banking sector struggling with insolvency. When liquidity dries up at the top, the impact filters down to the broader economy, creating uncertainty for every other business waiting for payments.
In January, Bangladesh Bank initially allowed customers of the five banks to withdraw up to Tk2 lakh. In July, the limit was raised to Tk10 lakh for urgent needs, including medical treatment for depositors and their immediate family members. The guidelines did not clearly specify arrangements for returning deposits held by institutions such as Desco.