The government has formed an eight-member working committee to implement the merger of five Shariah-based banks.
The Financial Institutions Division (FID) of the finance ministry issued an order on Monday regarding the formation of the committee, saying it would prepare a work plan to implement the proposed merger.
Md Kabir Ahmed, a deputy governor of Bangladesh Bank, will lead the committee. The other members are: Mohd Rashedul Amin, joint secretary of the finance division; Sheikh Farid and Mohammad Saidul Islam, joint secretaries of the FID; Mohammad Zahir Hussain, a director of Bangladesh Bank; Farid Ahmed, deputy secretary of the finance division; and Kazi Arif Uz Zaman and Md Nazim Uddin, additional directors of the central bank.
The interim government has initiated procedures to merge five troubled Islamic banks into the country's largest state-owned Shariah bank.
The banks are First Security Islami Bank, Global Islami Bank, Union Bank, Exim Bank, and Social Islami Bank.
The plan, drawn up under the newly enacted Bank Resolution Ordinance 2025, will require an estimated Tk35,200 crore in capital for the as-yet-unnamed institution.
Of this, Tk20,200 crore will come from the government, while Tk15,000 crore will be mobilized from institutional funds and by converting institutional deposits.
Earlier, a six-member working committee led by Kabir Ahmed was formed to plan and oversee the process.
The merger follows consultations held by central bank officials with the boards and management of the five lenders between September 2 and 4, in which Governor Mansur also participated virtually.
First Security Islami Bank, Union Bank, and Global Islami Bank agreed to the regulator's plan, while Exim Bank and Social Islami Bank opposed it.
Following the change of government in August 2024, Bangladesh Bank dissolved the lenders' previous boards and appointed new ones.
Forensic audits by global accounting firms, commissioned by the interim government, exposed their precarious financial health.
Non-performing loan ratios stood at 96.37% at First Security Islami, 97.8% at Union, 95% at Global Islami, 62.3% at Social Islami, and 48.2% at Exim Bank.