Bangladesh Bank Governor Dr Ahsan H Mansur has said that there was no alternative to merging the five financially weak Shariah-based banks.

He made the remarks on Sunday (16 Nov) while speaking at the Bangladesh Islamic Finance Summit held at a city hotel.

The governor said transparency is the most essential element for strengthening and revitalising the banking sector. “It is not possible to move forward without the participation of all parties — investors, depositors and officials.” 

Referring to the merger of the five troubled Shariah-based banks, he said, “We had no option other than merging these banks. We expect that, with proper governance, this process will ultimately bring positive outcomes for our economy.”

Earlier, on 5 November, Bangladesh Bank declared the five Shariah-based banks as non-functional and appointed administrators to run them. The banks are EXIM Bank, Social Islami Bank, First Security Islami Bank, Union Bank and Global Islami Bank.

Subsequently, on 9 November, a special online meeting of the central bank’s board, chaired by Governor Dr Mansur, granted a preliminary licence to ‘Sammilito Islami Bank’, a new state-owned Shariah-based bank that will operate through the merger of the five troubled institutions. 

Nazma Mobarak, Secretary of the Financial Institutions Division, has been appointed as the chair of the newly formed bank.