The merger of five weak private-sector Islamic banks into a single bank will happen before the elections, said Bangladesh Bank Governor Ahsan H Mansur on Sunday.
He also assured that during this process no employees of these banks will lose their jobs.
The five banks are First Security Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank and Exim Bank.
He made the announcement during a press conference held at the boardroom of the Bangladesh Bank.
Mansur further said: “Without waiting for the elections, the five Islamic banks will be merged within the next few months. We hope that the next government will also take this process forward.”
“If needed, some branches will be relocated. Banks with more urban branches may have to shift some to rural areas,” he added.
However, four of these banks were previously controlled by Saiful Alam, a Chittagong-based businessman known for his close ties to the AL government, and Exim Bank’s board was under the control of Nazrul Islam Mazumder, also a close associate of the ousted government.
Seeking anonymity, an official from the central bank told Dhaka Tribune: “The new bank will follow a fully Shariah-compliant model, and the entire process will be carried out under the Bank Resolution Ordinance 2025. A fresh banking license will be issued by Bangladesh Bank for the newly formed entity.”
Also a new board will be formed, with existing board members and representatives from various sectors.
However, until the merger is complete, the banks will operate under the direct supervision of the Bangladesh Bank.
The banks’ assets will be consolidated, and bad assets will be transferred to a management company, and the government, along with international development partners, will provide the required capital.
Recovering laundered money
The government can now appoint lawyers to recover laundered money if it wants, but the process of recovering the laundered money must be completed step by step with necessary legal procedure, the governor said.
At the press conference, Mansur also said: “The government can file cases in the country and abroad to prevent money laundering and bring back the laundered money. Lawyers will decide what kind of case will be filed and how it will be handled.”
“It is not possible to bring back any money without a final court verdict. For this, the necessary information and data must first be collected and presented in court, and through the judicial process, it must be proven that our claim is logical.”
Coming to an agreement with lawyers on both sides outside of court can be another way to recover the laundered money; however, this procedure will depend on the government's decision, the governor clarified.
Regarding these Alternative Dispute Resolution (ADR) methods, he said: “It is possible to get the laundered money back through this method too, but it is an out-of-court process. Here, lawyers from both sides reach an agreement through discussion and negotiation. However, whether this procedure is followed or not will depend on the government's decision. Bangladesh Bank will prepare and take necessary legal measures upon receiving the government's instructions.”
Legal action will have to be taken in domestic courts to recover assets within the country and in foreign courts to recover money laundered abroad. Bangladesh Bank has already finished all preparations, and they can only appoint lawyers once they receive the government's instructions, Mansur added.
