A writ petition has been filed with the High Court challenging the legality of the government’s decision to merge five Shariah-based private banks.

Barrister Mahsib Hossain filed the petition on Tuesday on behalf of Shahidul Islam, a general investor of one of the banks.

Bangladesh Bank’s governor, the finance secretary and other relevant officials have been made respondents in the writ.

On October 9, the Advisory Council approved the proposal to merge the five troubled banks—First Security Islami Bank, Global Islami Bank, Union Bank, EXIM Bank and Social Islami Bank.

The process is underway to form a new Shariah-based bank by combining these five institutions. Two names have been proposed for the new entity — “United Islamic Bank” and “Combined Islamic Bank.”

Following the council’s approval, Press Secretary Shafiqul Alam told reporters that the new bank would take over all liabilities and assets of the five institutions and continue operations under the merged structure.

Initially, the new bank will have an authorised capital of Tk 40,000 crore, with Tk 35,000 crore in paid-up capital. Of this, the government will provide Tk 20,000 crore, while Tk 15,000 crore will be raised by converting institutional depositors’ funds into shares through the bail-in process. The converted amount will later be repaid to depositors as per the resolution plan.

A bail-in refers to a mechanism under which a portion of depositors’ and creditors’ claims is written off and converted into equity to stabilise a distressed financial institution.