Capital Flight Forces Merger of Five Shariah Banks

Bangladesh Bank Governor Dr Ahsan H Mansur revealed on Sunday that a significant portion of the capital from the country’s five struggling Shariah-compliant banks had been moved abroad. As a result, the banks have been forced to merge in order to protect the sector’s stability.

Dr Mansur made the comments at the opening session of the Bangladesh Islamic Finance Summit 2025, which took place at a city hotel. The three-day summit aims to position Bangladesh as a prominent Islamic finance hub in South Asia.

He stated, “A large amount of the capital from the five Shariah-based banks has been siphoned off overseas. Sadly, even the most dynamic Islamic bank in the country has been drained.”

The five banks currently undergoing the merger process are EXIM Bank, First Security Islami Bank, Global Islami Bank, Union Bank, and Social Islami Bank. On 5th November, Bangladesh Bank dissolved the boards of these banks and appointed administrators to begin the formation of a new entity named Sammilito Islami Bank (Combined Islamic Bank).

Dr Mansur stressed the importance of transparency to revitalise and strengthen the banking sector. He called for active participation from all stakeholders, including investors, depositors, and employees, to ensure the success of the merger. He added that with strong governance throughout the process, the initiative would ultimately benefit the country’s economy.

Mashrur Arefin, Managing Director and CEO of City Bank, attended the event as a special guest. Other key speakers included M Kabir Hassan, Professor of Finance at the University of New Orleans, and Dr Eskandar Shah Mohd Rashid, CEO of ISRA.

The summit brought together regulators, Shariah scholars, Islamic banking professionals, and senior delegates from countries such as Bahrain, Pakistan, Malaysia, and the United States. Discussions are focused on strengthening governance, expanding financial inclusion, and aligning Bangladesh’s Islamic finance framework with global Shariah, governance, and accounting standards set by AAOIFI.