Five private Islamic banks in Bangladesh are set to merge into a single entity within the coming months as part of a major reform initiative to stabilize the banking sector.
The consolidation involves Social Islami Bank, Global Islami Bank, First Security Islami Bank, Union Bank, and EXIM Bank.
Bangladesh Bank Governor Dr. Ahsan H Mansur announced the plan, assuring stakeholders that no employees will lose their jobs due to the merger.
However, some branches may be relocated, encouraging banks with many urban branches to expand into rural areas.
The merger is an ongoing reform effort, independent of the upcoming national elections, and is expected to be completed within three to four months.
During the transition, the banks will be placed under temporary government control, with existing managing directors removed and a restructured board formed.
The new board will include members from the current banks and representatives from various sectors. The unified bank will operate under the central bank’s direct supervision.
This merger is enabled by the Bank Resolution Ordinance 2025, which grants Bangladesh Bank expanded powers to manage distressed financial institutions.
Currently, six banks are under resolution review, with five in the final phase. ICB Islamic Bank is excluded due to foreign ownership complexities.
The move follows asset quality reviews by international firms that revealed the need for stronger oversight to address longstanding issues like mismanagement and capital shortfalls.
The merger aims to restore public confidence, improve discipline, and ensure long-term stability in the banking sector.
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