Bangladesh Bank on Wednesday took control of five shariah-based banks after appointing administrators to each as part of a resolution plan to safeguard depositors’ interests and restore confidence in the banking sector.
The central bank said that shareholders—both sponsors and general investors—would receive nothing, as the share value of all five banks had fallen to zero with their net asset values showing negative balances of up to Tk 450 per Tk 10 share.
The five banks—First Security Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank, and EXIM Bank—will be merged into a single state-owned entity named Sammilito Islamic Bank.
Bangladesh Bank said the new bank would initially remain under government ownership and be transferred to the private sector within two years after a strategic partner is selected.
In letters issued on Wednesday, the central bank informed the five banks about the dissolution of their boards and the appointment of administrators.
A separate circular was issued to all scheduled banks and non-bank financial institutions, stating that the five institutions had been brought under the resolution process to rebuild public trust through improved governance, accountability, and depositor protection.
Bangladesh Bank governor Ahsan H Mansur announced at a press conference that the five banks had been officially declared ‘non-viable’ under the Bank Resolution Ordinance 2025.
He said each bank would now be overseen by a temporary administrator and a support team appointed by the central bank.
Mansur said the administrators were assigned four key tasks — keeping daily operations functional, maintaining large transactions such as remittance and letter of credit settlements, integrating the IT infrastructure for centralised management, and reorganising human resources and branches to eliminate duplication.
He said the initiative aimed to end chronic mismanagement and create a financially sound and professionally governed Islamic banking institution.
The new bank will have a paid-up capital of Tk 35,000 crore, making it the largest and most capitalised financial institution in the country, according to the governor.
He assured depositors that there was no reason for panic, emphasising that all deposits were safe under government ownership.
Depositors with up to Tk 2 lakh will be allowed to withdraw their entire funds immediately, while those with higher balances will receive payments in phases to be announced later through a government gazette.
The governor said that over 7.5 million depositors would be protected through the merger process and that depositors would receive market-based profit rates after merger.
Measures had also been taken measures to prevent excessive withdrawals.
He added that depositors are expected to regain access to their funds within a month and urged customers not to withdraw unnecessarily, as the new institution would be strong and stable.
The merged entity will function like a private bank but remain under state ownership initially.
Share prices of all five banks dropped sharply on the Dhaka Stock Exchange. EXIM Bank’s share price fell to Tk 3, First Security Islami Bank to Tk 1.9, Social Islami Bank to Tk 3.1, Union Bank to Tk 1.5, and Global Islami Bank to Tk 1.7 per share.
According to asset quality review on September 2024, the combined deposits of the five banks totaled Tk 1,47,368 crore, supported by a workforce of 15,060 employees.
Their total loan disbursement stood at Tk 1,90,484 crore, while the amount of defaulted loans reached Tk 1,46,948 crore.
