The Advisory Council of the interim government has approved a proposal to merge five financially distressed private Islamic Shariah-based banks into a single new entity.

The decision was made on Thursday at a meeting of the Advisory Council held at the Chief Adviser’s Office in Tejgaon, with Chief Adviser Professor Muhammad Yunus in the chair.

Chief Adviser’s Press Secretary Shafiqul Alam disclosed the information at a press briefing later at the Foreign Service Academy.

According to the announcement, the five banks to be merged are First Security Islami Bank, Global Islami Bank, Union Bank, EXIM Bank, and Social Islami Bank.

Although ICB Islamic Bank was initially included in the list, it was excluded from the merger process due to an ongoing High Court case over share ownership.

At the briefing, it was stated that the newly formed bank will have an authorized capital of Tk 40,000 crore and a paid-up capital of approximately Tk 35,000 crore.

Under the initial plan, around Tk 15,000 crore of institutional deposits will be converted into equity through a bail-in process, while the government will inject the remaining Tk 20,000 crore as capital support.

Initially, the new bank will operate as a state-owned institution, with plans to gradually transfer ownership to the private sector.

We expect the bank to be handed over to the private sector within five years,” said Press Secretary Shafiqul Alam.

To implement the merger, an eight-member working committee was formed on September 8, headed by Bangladesh Bank Deputy Governor Md Kabir Ahmed. The committee includes representatives from Bangladesh Bank, the Finance Division, and the Financial Institutions Division.