Dhaka Moves to Consolidate Five Islamic Banks , Likely to be Called ‘Al Fatah’

Bangladesh Bank is going to corroborate five financially weakened Shariah-based banks into a single institution, aiming to restore stability in the troubled sector. The new bank potentially named United Islami Bank or Al Fatah Bank. It will operate initially under government control before gradually transitioning to private ownership.

Ministry Approval Awaited

The central bank has already reached an win-win situation with the five banks Social Islami Bank, Global Islami Bank, First Security Islami Bank, Union Bank, and EXIM Bank and forwarded a proposal to the Ministry of Finance. It is desired that Regulators body will approve within days, which could clear the way for a government acquisition announcement as early as September The new entity may begin operations by October under the recently enacted Bank Ordinance 2025.

Cost of Rescue and External Support

The banks is merging to project Tk 30,000–35,000 crore. Of this, Tk 13,000 crore has been allocated in the national budget. Moreover, development partners have pledged about $2 billion equivalent to Tk 24,500 crore to support the restructuring.

Safeguards for Depositors and Workers

Bangladesh Bank has assured that all depositors will be protected. Smaller depositors will receive full cash repayment, while larger depositors may temporarily be compensated with shares in the new bank until liquidity is stabilized. That no bank employees will lose their jobs during the restructuring process, in an effort to calm fears of mass layoffs said, Governor Dr. Ahsan H. Mansur.

Economists say that while bank mergers are common worldwide but it will be exceptional case for Bangladesh because it stems from alleged financial irregularities rather than market-driven weakness.

Former World Bank economist Dr. Zahid Hossain utter the importance of restoring credibility, The real test will be whether management appointments are made on merit and governance practices are strengthened. Without that, the merger will not achieve its intended goal.