The new state-run Shariah bank, which will be formed through the merger of five crisis hit Islamic banks, will be officially launched next week, according to Bangladesh Bank governor Ahsan H Mansur.
He made the announcement at the 4th Bangladesh Economic Summit held in the capital on Saturday.The bank will start with paid-up capital of Tk 35,000 crore, the highest ever for any bank in the country.
The governor said that the new entity is being created under the Bank Resolution Ordinance, which the central bank is using for the first time to restructure weak banks.
The five banks to be merged into single entity were First Security Islami Bank, Union Bank, Global Islami Bank, Social Islami Bank and Exim Bank, all of which have faced prolonged liquidity stress, governance failures and rising defaults.
Of the Tk 35,000 crore capital base, the government will provide Tk 20,000 crore. The remaining funds will come from the assets and equity of the five institutions being merged.
The central bank earlier granted a letter of intent for the new lender, to be named Sammilito Islami Bank PLC. The government has already nominated Nazma Mobarek, secretary of the Financial Institutions Division, as chair of the board.
Mansur said the goal is to convert five weak banks into a single stable bank backed by strong capital support and tighter oversight.
Since the interim government took office, Bangladesh Bank has injected about Tk 35,300 crore in liquidity support to keep these lenders afloat. He said that the merger offers a path to end repeated bailouts and restore discipline to a segment of the banking sector that has long remained vulnerable.
He acknowledged that the broader industry faces deep structural problems, including non-performing loans that he estimated at 35 per cent, far above the earlier official figures.
Mansur said that resolving bad loans could take five to ten years and warned that both banks and non-bank financial institutions showing sustained deterioration will face strict action.
Nine non-bank financial institutions are set to be liquidated under the new ordinance.
He said that inflation is 8.20 per cent, and if it falls below this or into the 7 per cent range, the policy rate will be reduced.
Mansur added that essential goods for Ramadan will not face import or supply disruptions, as banks have already opened the required letters of credit.
