A writ petition was filed on Tuesday with the High Court (HC) challenging the legality of the government’s decision to merge five financially distressed private banks into a single Shariah-based institution.

The petition was submitted by Barrister Mahsib Hossain, representing one Shahidul Islam, a general investor.

The Bangladesh Bank Governor, the Finance Secretary and other officials have been made respondents to the rule.

The writ is expected to be placed before a competent bench of the HC bench for hearing soon. The move comes weeks after the government’s Advisory Council approved the merger proposal on October 9 in an effort to stabilise the troubled banking sector.

The troubled banks are First Security Islami Bank, Global Islami Bank, Union Bank, EXIM Bank and Social Islami Bank.

Under the plan, the five entities will be merged into a new Shariah-compliant commercial bank, for which two names have been proposed—“United Islamic Bank” and “Combined Islamic Bank.”

Authorities have assured that no employee will lose their job and that depositors’ funds will remain protected.

According to initial plans, the new institution will have an authorised capital of Tk 40,000 crore and a paid-up capital of Tk 35,000 crore.

Of this, the government will inject Tk 20,000 crore—half in cash and half through the issuance of Sukuk bonds, an Islamic financial instrument that serves as a Shariah-compliant alternative to interest-bearing bonds.

The remaining Tk 15,000 crore will be generated through a bail-in process, converting institutional deposits into equity, which will later be repaid under a formal resolution plan.

The new bank will assume all assets and liabilities of the five merging institutions and will initially operate as a state-owned bank.

Over time, ownership will gradually be transferred to the private sector, with the government aiming to complete the transition within five years.