Bangladesh Bank has dissolved the boards of five Shariah-compliant banks as part of a significant restructuring plan to merge them into a single, larger Islamic bank.

The five banks affected are Exim Bank, Social Islami Bank, First Security Islami Bank, Union Bank, and Global Islami Bank. The central bank notified the managing directors of the concerned banks of its decision, explaining that the merger process would now be directly managed by the regulator.

A senior official from Bangladesh Bank confirmed on 5 November that the names of the administrators who will temporarily head the merged entity will be announced in a press briefing by the central bank governor at 4pm today.

The five banks whose boards have been dissolved include First Security Islami, Global Islami, Union, Social Islami, and Exim. Four of these banks were previously linked to the S Alam Group, while the fifth was under the ownership of businessman Nazrul Islam Mazumder.

Over the years, these banks have faced financial difficulties after large sums of money were allegedly siphoned off through irregularities and questionable loan practices. These issues have led to their distressed financial state.

In September, Bangladesh Bank’s board approved a proposal to consolidate the five banks into a single larger entity, which will become the country’s largest bank by assets, valued at approximately Tk 2.20 trillion. This merger is seen as a major step in stabilising the country’s Islamic banking sector and streamlining its operations.