Dhaka, Aug 21 (V7N) – Bangladesh Bank is considering the merger of five Sharia-compliant banks that are in a fragile financial state due to high default rates and poor asset quality. Officials say these banks, including Union Bank, First Security, SIBL, Global Islami, and Exim Bank, have defaulted on 50 to 98 percent of their distributed loans and are struggling to return customer deposits.

Despite previous financial assistance from Bangladesh Bank, the banks have not recovered, prompting discussions on a merger. Initial activities, including asset valuation, have already been completed, and Bangladesh Bank is now consulting with the government to finalize the next steps.

Bangladesh Bank Assistant Spokesperson Mohammad Shahriar Siddiqui said, “Since budget support will be required from the government, discussions are ongoing at the highest level. Once the government consents, Bangladesh Bank will proceed in principle and begin the merger process.”

The first phase of the merger is expected to cover the five Sharia-compliant banks, with an estimated requirement of Tk 30,000–35,000 crore, although figures are provisional and may change based on final assessments.

Analysts emphasize that merging is the only viable solution for restoring the health of these weak banks. They also stress the importance of a specific roadmap, careful execution of procedural steps, and protection of both deposits and employee interests.

Dr. Fahmida Khatun, Executive Director of the Center for Policy Dialogue (CPD), noted that the process may take time due to procedural requirements, but it is crucial to ensure the banks’ stability and prevent future weaknesses.

END/SMA/AJ