The government will initially provide a capital of Tk20,200 crore for the new ‘United Islami Bank’, formed by merging five troubled Islami Banks.

For the new Islami Bank the proposed required capital is Tk 35,200 crore. After the merger of five Islami Banks, this will be the largest bank in the country.

A decision in this regard took place at a meeting held at the ministry of finance on Monday. 

The meeting, chaired by Finance Adviser Salehuddin Ahmed, was attended by the Chief Adviser's Special Assistant Anisuzzaman Chowdhury, Finance Secretary Khairuzzaman Majumder, National Board of Revenue (NBR) Chairman Md. Abdur Rahman Khan, Financial Institutions Division Secretary Nazma Mobarek, and relevant Bangladesh Bank officials. 

Bangladesh Bank Governor Ahsan H Mansur joined the meeting virtually. These details were gathered from several officials present at the meeting.

With the consent of the interim government, Bangladesh Bank has initiated a move to merge five Islami banks that are facing liquidity crises and various problems due to irregularities and corruption of S Alam Group. These banks will be consolidated to form a new single Islamic bank.

A working committee led by Deputy Governor Md. Kabir Ahmmod has been formed by Bangladesh Bank to finalise the time-bound action plan. The committee includes representatives from the Finance Division and the Financial Institutions Division.

Last week, Bangladesh Bank held a hearing with the five banks to be merged, where they were asked one last time why they should not be brought under the merger framework. 

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Three of the banks—First Security Islami Bank, Union Bank, and Global Islami Bank—agreed to the merger without objection. 

However, the other two banks on the list, EXIM Bank and Social Islami Bank, requested more time. The central bank, however, presented reports from local and foreign auditors, making it clear that there is no other option for these banks besides a merger.