First Security Islami Bank PLC (FSIBL) has agreed in principle to a Bangladesh Bank plan to merge five troubled banks into a new bank called ‘United Islami Bank’.
FSIBL Chairman Mohammad Abdul Mannan disclosed the bank’s stance after a meeting with Bangladesh Bank Governor Ahsan H Mansur on Tuesday.
He said discussions are underway to combine First Security Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank and Exim Bank into one entity, as the banks reel from a severe financial crisis linked to massive loan defaults by the S Alam Group.
“Although three banks have verbally indicated support for the merger, the other two are yet to give their consent,” Mannan said, without naming the reluctant ones.
Dismissing the possibility of dissolving the banks altogether, Mannan described the central bank’s consolidation proposal as more pragmatic, adding that FSIBL had no objection to the move.
The chairman stressed that protecting depositors was his foremost priority in the talks. “We want to make sure depositors do not face any losses in this process,” he said.
Mannan also alleged that the S Alam Group siphoned off Tk 38,000 crore from FSIBL alone through direct and proxy borrowing.
“Because of this malpractice, a bank that was once in sound condition has now fallen into deep distress,” he said.