Due to extreme financial distress, employees of the five Shariah-based banks that are set to merge may face reductions in salaries and other benefits. This decision comes as the financial health of these banks remains weak.

The banks are: First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, and EXIM Bank. These banks are currently struggling even to pay regular salaries to their 16,000 employees and officers.

On Wednesday (27 November), during a high-level meeting at the Bangladesh Bank headquarters between the administrators of the banks and the central bank, the banks requested about Tk 1,000 crore in liquidity support to ease the crisis. Following the request, the central bank approved approximately Tk 350 crore in new liquidity support.

Officials from the central bank, speaking on condition of anonymity, said that Governor Ahsan H. Mansur instructed the administrators during the meeting to quickly reduce employees’ salaries and other benefits due to the banks’ fragile financial condition. According to information from the central bank, since the interim government took office, these five banks have so far received a total of Tk 35,300 crore in liquidity support, but they have not yet been able to repay the amount.

These five banks have around 16,000 employees, and one administrator confirmed that the salary reduction process will be implemented quickly. An employee of Union Bank said that although salaries are deposited into their accounts, employees cannot withdraw or use the money promptly due to the liquidity crisis, causing severe financial anxiety among staff.

In a recent statement, Bangladesh Bank confirmed that these five banks are paying employee salaries from customers’ deposits. For example, First Security Islami Bank recorded a negative operating income of Tk 4,308 crore as of last December, while its expenses for salaries and allowances amounted to Tk 650 crore. This means employee salaries are being paid from depositors’ funds. Last year, the bank incurred a net loss of Tk 5,450 crore. Additionally, on 26 August, the central bank wrote to the bank’s chairman stating that inspections had found “serious governance failures.”

Bangladesh Bank has given preliminary approval for the five banks to merge into a new state-owned entity named Combined Islami Bank PLC, which is expected to launch later this month.