The Council of Advisers has approved a proposal to merge five financially troubled private Islamic Shariah-based banks into a single new entity.
The decision was taken on Thursday during a meeting of the Council held at the Chief Adviser’s Office in Tejgaon, chaired by CA Prof Muhammad Yunus.
Chief Adviser’s Press Secretary Shafiqul Alam shared the information at a press briefing later at the Foreign Service Academy.
According to the announcement, the five banks to be merged are First Security Islami Bank, Global Islami Bank, Union Bank, EXIM Bank and Social Islami Bank.
Although ICB Islamic Bank was initially included, it has been excluded from the merger due to an ongoing High Court case concerning share ownership.
The newly formed bank will have an authorized capital of Tk 40,000 crore and a paid-up capital of around Tk 35,000 crore.
Under the plan, approximately Tk 15,000 crore of institutional deposits will be converted into equity through a bail-in process, while the government will provide the remaining Tk 20,000 crore as capital support.
Initially, the bank will operate as a state-owned institution, with a plan to gradually transfer ownership to the private sector.
“We expect the bank to be handed over to the private sector within five years,” said Press Secretary Shafiqul Alam.
To oversee the merger, an eight-member working committee was formed on September 8, headed by Bangladesh Bank Deputy Governor Md Kabir Ahmed.
The committee includes representatives from Bangladesh Bank, the Finance Division, and the Financial Institutions Division.