The government has approved the much-discussed merger of five financially distressed Shariah-based banks into a single state-owned entity, marking the first such move in the country’s banking history.
On Thursday, the Advisory Council of the Interim Government granted the approval at a meeting chaired by Chief Adviser Prof Muhammad Yunus at his office in Tejgaon.
Following the meeting, the Chief Adviser’s Press Secretary Shafiqul Alam briefed reporters on the decision at a press conference held at the Foreign Service Academy in Dhaka.
He said that the new bank, to be named United Islamic Bank or Integrated Islamic Bank, is expected to be handed over to the private sector within five years.
“No employee will lose their job as a result of the merger, and no depositor will lose their deposits,” he added.
The five banks to be merged are First Security Islami Bank, Global Islami Bank, Union Bank, EXIM Bank, and Social Islami Bank. Although ICB Islamic Bank was initially considered, it was excluded from the process due to an ongoing ownership-related court case.
The press secretary also revealed that the proposed new bank would have an authorised capital of Tk40,000 crore, with a paid-up capital of approximately Tk35,000 crore.
According to the central bank’s draft outline, the merger process will require Tk35,000 crore. Of this, Tk20,000 crore will come directly from the government treasury – essentially taxpayer money.
Another Tk10,000 crore is expected from the Deposit Insurance Fund, which will require legal amendments to allow lending.
The remaining Tk5,000 crore is expected to come from multilateral development partners, including the IMF, World Bank, and ADB, as part of broader financial sector support.
To implement the merger, the government formed an eight-member working committee on 8 September, comprising representatives from Bangladesh Bank, the Finance Division, and the Financial Institutions Division, chaired by Bangladesh Bank Deputy Governor Md Kabir Ahmed.
LND/SAE
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