Merger of Five Weak Shariah Banks Postponed, Two Banks Refuse to Join

Staff Reporter | PNN

The merger of five struggling Shariah-compliant banks has been temporarily halted. While First Security Islami Bank, Union Bank, and Global Islami Bank agreed to the merger, Social Islami Bank (SIBL) and Exim Bank did not consent. Even after a meeting with Bangladesh Bank, the two banks have maintained their stance and have approached the court. Sources say that due to the new political context, no final decision can be made before further developments.

Bangladesh Bank spokesperson Arif Hossain Khan said that the merger proposal was based on the actual financial situation of the Shariah banks. However, since SIBL and Exim Bank wish to maintain their positions, the merger has been delayed.

Governor Dr. Ahsan H. Mansur met with all five banks, but the two banks presented arguments against the merger. SIBL’s founding chairman Major (Retd.) Dr. Rezaul Haque said, “We need time to overcome our weaknesses. Even if the central bank pressures us, we cannot be forcibly merged. Our position has been safeguarded through the court.” Exim Bank Chairman Nazrul Islam Swapon said, “Currently, the bank is trying to recover. We requested time to regain strength without merging. The governor has promised support.”

According to Bangladesh Bank data, as of May, the total deposits of the five banks amounted to BDT 1,36,546 crore, and total loans were BDT 1,95,413 crore, of which BDT 1,47,000 crore were classified as non-performing loans. Bank-specific analyses show non-performing loan ratios of 98% for Union Bank, 96% for First Security, 95% for Global, 62% for SIBL, and 48% for Exim Bank.

Due to the stance of the two banks, the entire merger process has become uncertain. This situation threatens not only economic stability but could also undermine investor confidence ahead of elections.

Union Bank Chairman M. Farid Uddin said, “Depositors come to withdraw their money, but they cannot. The sooner a decision is made, the better.” First Security Chairman Mohammad Abdul Mannan stated, “We do not disagree with Bangladesh Bank’s decision.” Global Islami Bank Chairman Mohammad Nurul Amin confirmed that they have agreed to the merger in the meeting.

According to Bangladesh Bank records, discussions covered capital deficits, liquidity shortages, non-performing loans, CRR, and provision shortfalls of the five banks. The central bank hopes that the merger would allow the banks to recover. However, with two banks refusing, the process has stalled. Spokesperson Arif Hossain Khan added, “If the banks can recover on their own, that would be good. But currently, depositors cannot access their money. Whether the merger process will resume is uncertain at this time.”