Bangladesh Bank has finalized the decision to merge five Islamic banks. The decision was finalized at the central bank’s board of directors meeting on Tuesday. The meeting was held under the chairmanship of Bangladesh Bank governor Dr Ahsan H Mansur.
Bangladesh Bank spokesperson Arif Hossain Khan confirmed the matter to the media. He also said that the final decision was taken in the meeting to merge five Islamic banks. In light of the Bank Resolution Ordinance, a temporary administrator team consisting of multiple members will be appointed in each bank. He also stated that the boards of directors of the five banks will technically remain in place.
The banks are: First Security Islami Bank, Union Bank, Global Islami Bank, Exim Bank, and Social Islami Bank.
At the meeting, the board also decided to forward the draft amendment of Bangladesh Bank Order, 1972 to the Advisory Council for final approval. It is not yet clear which provisions have been added or omitted in the draft, but since the final approval rests with the Advisory Council, the draft has been sent there, the spokesperson further said.
As per previous reports, due to various irregularities during the previous government’s tenure, 48%-98% of loans in these five banks have become non-performing. According to Bangladesh Bank data, the combined default loans of the five banks stand at around Tk147,000 crore — about 77% of their total outstanding loans. Of the Tk35,200 crore required for the merger process, the government will provide Tk20,200 crore.
