BM Desk : In a bold move to streamline the country’s Islamic banking sector, Bangladesh Bank has officially dissolved the boards of five financially distressed Shariah-based banks in preparation for their merger into a single, larger Islamic bank.

The central bank issued a notice informing the managing directors of the affected banks, instructing them that the merger process would be directly overseen by the regulatory body. A senior official at Bangladesh Bank confirmed that the names of the temporary administrators who will lead the merged bank will be disclosed later today, during a press briefing by the Governor at 4 p.m.

The banks whose boards have been dissolved are: First Security Islami Bank, Global Islami Bank, Union Bank, Social Islami Bank, and EXIM Bank.

These five banks have faced significant financial instability in recent years, primarily due to alleged irregularities, corruption, and large-scale loan defaults. Four of the institutions were reportedly under the ownership of the S Alam Group, while the fifth was controlled by businessman Nazrul Islam Mazumder. Over time, these banks accumulated massive debts, with billions of taka allegedly siphoned off through questionable practices.

The merger is part of an effort by Bangladesh Bank to consolidate the Islamic banking sector and strengthen the financial stability of these institutions. Authorities hope that the new, larger entity will be more resilient and competitive in the market. The central bank’s intervention follows growing concerns over the banks’ ability to operate effectively amidst mounting financial troubles.

The merger process is expected to take several months, with Bangladesh Bank closely monitoring the situation to ensure a smooth transition. The central bank is expected to announce further details about the restructuring and plans for the newly formed Islamic bank after today’s press conference.