The government has made a significant move to restore stability within the nation’s banking sector. The Finance Ministry has sanctioned a plan to consolidate five sharia-compliant banks that are currently facing financial difficulties. Approximately Tk 20,200 crore will be allocated by the government to support this initiative.

The merger will involve First Security Islami Bank, Global Islami Bank, Union Bank, Social Islami Bank, and Exim Bank.

This decision was reached during a meeting of the Financial Institutions Division of the Finance Ministry on Sunday (September 7). The meeting was led by Finance Advisor Salahuddin Ahmed, with Bangladesh Bank Governor Ahsan H. Mansur attending virtually.

The estimated capital required for the merged banks is Tk 35,200 crore. Of this total, the government will contribute Tk 20,200 crore in cash support, while the remaining Tk 15,000 crore will be sourced through share issuance on behalf of government institutions that have deposits tied up in these banks.

Four banks—First Security Islami, Global Islami, Union Bank, and Social Islami Bank—have already consented to the merger process. However, Exim Bank has requested additional time to stabilize its financial situation.

This initiative is being executed under the recently enacted Bank Resolution Ordinance, 2025. This ordinance grants Bangladesh Bank the authority to acquire struggling banks, transfer assets, establish bridge banks, and conduct asset transfers through competitive bidding when necessary. Once the process commences, shareholders will be prohibited from selling or transferring their shares.

A six-member subcommittee, led by Bangladesh Bank Deputy Governor Md. Kabir Ahmed, has been established to supervise the implementation.

This marks the first significant effort to merge Sharia-compliant banks in the country. The government anticipates that this decision will be crucial in restoring confidence in the banking sector, which has been shaken by defaulted loans and loan scams in recent years.