In a decisive move to stabilise the nation’s Shariah-based financial sector, the Central Bank of Bangladesh has ratified the definitive “Resolution Scheme” for the amalgamation of five Islamic lenders. The landmark restructuring will see First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, and EXIM Bank integrated into a single, newly formed powerhouse: the Combined Islamic Bank. This consolidation is designed to address systemic liquidity challenges by converting substantial institutional debts into a robust equity base.
The newly established entity is set to possess an authorised capital of 40,000 crore BDT, with a total paid-up capital of 35,000 crore BDT. To underpin this transition, the government has provided an initial capital injection of 20,000 crore BDT, assuming the role of the primary “Class A” shareholder. The remaining 15,000 crore BDT will be generated through a mandatory conversion of fixed deposits belonging to institutional entities, effectively transforming major creditors into long-term stakeholders.
Capital Allocation and Shareholding Tiers
The restructuring policy introduces a tiered shareholding system to manage the diverse interests of the government and institutional depositors. The breakdown of the bank’s paid-up capital is as follows:
| Share Class | Stakeholder Category | Conversion Amount (Crore BDT) |
| Class A | Government of Bangladesh | 20,000 |
| Class B | Banks and Financial Institutions | 7,500 |
| Class C | Non-Financial Institutional Entities | 7,500 |
| Total | Paid-up Capital Base | 35,000 |
Under this scheme, 7,500 crore BDT in fixed deposits from participating banks and financial institutions will be converted into “Class B” shares. Simultaneously, another 7,500 crore BDT from non-financial corporate depositors will be reclassified as “Class C” equity. This debt-to-equity swap is a strategic measure to reduce the bank’s immediate withdrawal liabilities while significantly strengthening its capital adequacy ratio.
Essential Safeguards and Regulatory Authority
The Central Bank has explicitly exempted certain “sensitive” institutional funds from this mandatory conversion to ensure social and diplomatic stability. The share conversion policy will not affect:
Educational institutions and religious organisations.
Hospitals and healthcare providers.
Employee Provident and Gratuity Funds.
Joint venture and multinational corporations.
Foreign embassies and diplomatic missions.
This safeguard ensures that the operational liquidity for vital social infrastructure and the retirement savings of workers remain intact. The Central Bank of Bangladesh has stated that it retains final jurisdiction over any disputes or future changes in shareholding status. By consolidating these five entities, the regulator aims to forge a resilient institution capable of restoring public confidence and ensuring the longevity of Islamic banking in Bangladesh.