Bangladesh Bank has decided to appoint administrators to supervise the planned merger of five struggling Shariah-based private banks into a single state-owned Islamic lender, in what officials described as a major step towards stabilising the sector.

The decision was approved at a meeting of the central bank’s board on Tuesday, its spokesperson Arif Hossain Khan told reporters.

He said administrator teams, each comprising several members, would be placed in Exim Bank, First Security Islami Bank, Social Islami Bank, Global Islami Bank and Union Bank to guide the consolidation process.


The existing boards and managing directors will remain in their positions, but they will have no effective authority. Their role will gradually become inactive, Khan noted.

The merger is expected to take at least two years to complete. Safeguarding depositors’ interests was a key consideration in the board’s discussions, Khan added. 

From the beginning of the process, administrator teams will be stationed at each of the five banks and once the consolidation is finalised, the current boards will be dissolved automatically.

Earlier this month, the boards of First Security Islami, Global Islami and Union Bank backed the merger following hearings that ran from 2 to 4 September. Social Islami Bank and Exim Bank opposed the move.

To support the restructuring, the government on 7 September allocated Tk35,000 crore, of which Tk20,200 crore has been earmarked as capital for the new entity.

The planned consolidation marks the first large-scale attempt by the authorities to address mounting weaknesses among private Shariah-compliant banks, several of which have been grappling with liquidity and governance challenges.