Bangladesh Bank Governor Ahsan H Mansur today announced that United Islami Bank PLC, formed through the merger of five financially distressed Shariah-based banks, is set to be officially launched next week.
Speaking at the 4th Economic Summit held at a Dhaka hotel on Friday (29 November), the governor said the consolidation is being carried out under the Bank Resolution Ordinance, marking the first major banking merger under the new framework.
“The new bank will have a paid-up capital of Tk35,000 crore, with the government contributing Tk20,000 crore,” he said, adding that the goal is to “create a strong bank from five weak banks.”
Earlier this month, the central bank granted initial approval and issued a letter of intent for the formation of United Islami Bank PLC. The five merging banks have received approximately Tk35,300 crore in liquidity support from Bangladesh Bank since the interim government took office last year.
According to officials, Nazma Mobarek, secretary of the finance ministry’s Financial Institutions Division, will serve as the new chairman of the bank’s board. The board will also include seven new directors—five representing the government and two from the private sector.
Governor Mansur highlighted several ongoing challenges in the banking sector, noting that non-performing loans currently stand at 35%, a situation he said will take “five to ten years” to resolve.
He said the current 10% policy rate is not high and may be reduced once inflation falls below 8.20%. He also confirmed that decisive legal measures will be taken against weak banks and financial institutions, including the closure of nine non-bank financial institutions, with full government backing.
Ahsan Mansur warned that banks and NBFIs exhibiting negative performance trends will face cautionary notices and corrective action. “This is not an isolated incident,” he said. “Legal provisions have been put in place to ensure accountability.”
The governor expressed confidence that future governments would support the structural reforms underway in the financial sector.
He also said the foreign exchange market has stabilised without intervention, with the dollar rate moving from Tk120 to Tk122.50 since he assumed office. “Banks now have sufficient dollars, and all margins have been removed. Businesses can open LCs of any amount,” he added.
Addressing concerns about essential imports ahead of Ramadan, he assured that all necessary letters of credit have already been opened and that smuggling has been effectively controlled.
