The Council of Advisers has approved a proposal to merge five financially troubled private Islamic Shariah-based banks into a single new entity.
The decision was taken on Thursday during a meeting at the Chief Adviser’s Office in Tejgaon, chaired by Chief Adviser Prof. Muhammad Yunus.
Chief Adviser’s Press Secretary Shafiqul Alam briefed the media at the Foreign Service Academy, confirming the banks involved in the merger: First Security Islami Bank, Global Islami Bank, Union Bank, EXIM Bank, and Social Islami Bank. Initially, ICB Islamic Bank was included but later excluded due to an ongoing High Court case over share ownership.
The new bank will have an authorized capital of Tk 40,000 crore and a paid-up capital of around Tk 35,000 crore. Under the plan, approximately Tk 15,000 crore of institutional deposits will be converted into equity through a bail-in process, while the government will provide the remaining Tk 20,000 crore as capital support.
The bank will initially operate as a state-owned institution, with plans to gradually transfer ownership to the private sector. “We expect the bank to be handed over to the private sector within five years,” said Shafiqul Alam.
To oversee the merger, an eight-member working committee was formed on September 8, led by Bangladesh Bank Deputy Governor Md Kabir Ahmed, including representatives from Bangladesh Bank, the Finance Division, and the Financial Institutions Division.
