Online Report
Bangladesh Bank (BB) has decided to appoint administrators to oversee the merger of five struggling Shariah-based private banks into a single state-owned bank, in what is set to be the largest restructuring in the country’s Islamic banking sector.
The decision was made at a special board meeting chaired by Governor Dr Ahsan H Mansur on Tuesday at the central bank headquarters.
Officials said that office orders will soon be issued to dissolve the existing boards of the banks and appoint administrators, each supported by a four-member team.
According to the plan, First Security Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank, and Exim Bank will be consolidated into a new state-owned institution, provisionally named United Islami Bank.
The central bank is expected to grant the licence for the new entity shortly.
All assets and liabilities of the five banks will be transferred to United Islami Bank, while their boards and managing directors will be dissolved. Shares of the merged banks will be voided, with provisions for future restructuring.
To recover government investment, shares of the new bank will eventually be sold to the private sector. Large depositors may be allowed to convert part of their deposits into equity, though small depositors will retain full access to their funds.
The move follows a forensic audit that found defaulted loans at the five lenders ranging from 48 to 98 percent. Bangladesh Bank estimates the merger will require Tk 35,200 crore, of which Tk 20,200 crore will be provided by the government.Traditional clothing
Bangladesh Bank (BB) has decided to appoint administrators to oversee the merger of five struggling Shariah-based private banks into a single state-owned bank, in what is set to be the largest restructuring in the country’s Islamic banking sector.
The decision was made at a special board meeting chaired by Governor Dr Ahsan H Mansur on Tuesday at the central bank headquarters.
Officials said that office orders will soon be issued to dissolve the existing boards of the banks and appoint administrators, each supported by a four-member team.
According to the plan, First Security Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank, and Exim Bank will be consolidated into a new state-owned institution, provisionally named United Islami Bank.
The central bank is expected to grant the licence for the new entity shortly.
All assets and liabilities of the five banks will be transferred to United Islami Bank, while their boards and managing directors will be dissolved. Shares of the merged banks will be voided, with provisions for future restructuring.
To recover government investment, shares of the new bank will eventually be sold to the private sector. Large depositors may be allowed to convert part of their deposits into equity, though small depositors will retain full access to their funds.
The move follows a forensic audit that found defaulted loans at the five lenders ranging from 48 to 98 percent. Bangladesh Bank estimates the merger will require Tk 35,200 crore, of which Tk 20,200 crore will be provided by the government.Traditional clothing