Online Report
Bangladesh Bank Governor Dr. Ahsan H Mansur has said that the central bank will begin the process of merging five financially weak Islamic banks within the next week, as part of a major initiative to stabilize the country’s fragile banking sector.
In an exclusive interview with a private television channel, the governor stated that asset valuation reviews have been completed for First Security Islami Bank, Global Islami Bank, Union Bank, Social Islami Bank, and EXIM Bank—all of which have been flagged for critical financial vulnerabilities.
According to the assessments, the non-performing loan (NPL) ratios in these institutions range between 48% and 96%.
“These banks will be merged and brought under government management. We have already requested the necessary budget allocation from the government to initiate the process,” Governor Mansur said.
The merger is part of broader banking sector reforms launched after Dr. Mansur took office a year ago, with the aim of addressing systemic irregularities, unchecked loan defaults, and declining public trust.
He further indicated that an additional 20 banks, including several state-owned ones, may undergo similar restructuring, depending on the findings of ongoing assessments.
Regarding Islami Bank Bangladesh Limited (IBBL), which is majority-owned by S. Alam Group, the governor disclosed that efforts are underway to sell up to 82% of its shares to domestic or foreign investors. Funds generated from the sale will be used to address the bank’s capital shortfall.
Despite the serious concerns surrounding these institutions, the governor emphasized that the government currently has no plans to shut down any bank. “Our objective is to stabilize the system, not to trigger panic. Weak banks will be supported, restructured, and held accountable,” he added.
The restructuring initiative comes at a time when the banking sector continues to face criticism for mismanagement and lax regulatory enforcement, which have led to mounting bad debts and erosion of depositor confidence.