Five-bank merger process to continue: BB governor

Bangladesh Bank Governor  Mostaqur Rahman has said that the operations of the state-controlled Sammilito Islami Bank, formed through the merger of five weak Islamic banks, will continue, and the consolidation process will move forward as planned.

The governor made the remarks at a meeting held at his office on Tuesday afternoon with administrators appointed to the five merged banks and senior officials of the central bank, according to meeting sources.

During the meeting, the governor was briefed on the rationale and process behind the merger. He instructed officials to continue the ongoing reform measures initiated by the central bank and to take all possible alternative steps to recover defaulted loans.

He also emphasised the need to help reopen shuttered factories that have outstanding bank loans, within the legal framework, to boost employment and production.

Officials said efforts would be made to ensure that closed industrial units resume operations and clear foreign liabilities where applicable.

Bangladesh Bank Executive Director and spokesperson Arief Hossain Khan confirmed the Daily Sun that the reform initiatives already underway would continue.

He said the governor reiterated that the merger process of the five banks would proceed as planned.

Meeting sources said the governor stressed the importance of increasing deposits, accelerating loan recovery and expanding overall business activities.

He also instructed officials to expedite the appointment of a managing director (MD) for the United Islami Bank. The existing board of directors will remain in place.

Following the fall of the Awami League government, the interim government moved to merge five financially distressed Islamic banks as part of broader banking sector reforms under the previous governor Ahsan H Mansur.

The five banks- EXIM Bank, Social Islami Bank Limited, First Security Islami Bank Limited, Union Bank and Global Islami Bank- were consolidated to form the state-controlled Sammilito Islami Bank.

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The newly formed bank began operations with a capital base of Tk35,000 crore. Of this, Tk20,000 crore was provided by the government, while the remaining Tk15,000 crore is to be mobilised from depositors.

In addition, authorities have initiated steps to pay Tk12,000 crore from the deposit insurance fund, providing up to Tk200,000 each to approximately 7.5 million depositors.

Although the new bank has opened its head office at Senakalyan Bhaban in Motijheel, its chairman, former senior secretary Mohammad Ayub Miah, and acting managing director Md Shawkatul Alam-who also serves as administrator of EXIM Bank-are currently operating from EXIM Bank’s office.