A new state-owned Islamic bank, titled ‘United Islamic Bank,’ is in the process of being established through the consolidation of five financially struggling Islamic Sharia-compliant banks. To facilitate this, an eight-member working committee was formed on Monday by the Financial Institutions Division of the Ministry of Finance.

In a meeting held last Sunday, which was chaired by Finance Advisor Dr. Salehuddin Ahmed, the draft proposal for creating the new bank by merging Exim Bank, Social Islamic Bank, First Security Islamic Bank, Global Islamic Bank, and Union was approved.

The primary duty of this working committee is to develop a comprehensive action plan for the merger of the five banks. Md. Kabir Ahmed, the Deputy Governor of Bangladesh Bank, has been appointed as the committee’s convener. The committee includes the following members:

• Mohammad Rashedul Amin, Joint Secretary of the Finance Department at the Ministry of Finance
• Farid Ahmed, Deputy Secretary
• Joint Secretaries Sheikh Farid and Mohammad Saidul Islam from the Financial Institutions Department
• Mohammad Zahir Hossain, Director of the Bank Resolution Department at Bangladesh Bank
• Additional Directors Kazi Arif Uz Zaman and Mohammad Nazim Uddin

New bank funding and capital

As a result of this merger, Islamic banks struggling with issues stemming from irregularities and corruption during the previous Awami League government’s time will be consolidated. The projected total capital for the new bank is estimated at Tk 35,200 crore. Of this amount, the government will contribute the initial Tk 20,200 crore. The additional Tk 15,000 crore will be sourced from the Deposit Insurance Fund and through the conversion of institutional deposits of the banks into shares.