GIB Agrees to Merger Path, SIBL Seeks Time to Recover

Bangladesh’s banking sector faces contrasting responses to the central bank’s proposed mergers and acquisitions (M&A) strategy, aimed at rescuing financially strained lenders. Global Islami Bank (GIB) has agreed to comply with the Bangladesh Bank’s resolution framework, while Social Islami Bank Limited (SIBL) has opted to pursue its own recovery plan, rejecting immediate participation in merge.

During a meeting at the Bangladesh Bank headquarters on Thursday, chaired by Governor Dr. Ahsan H. Mansur, SIBL requested additional time to resolve its liquidity crisis independently. Founder-chairman Major (Retd.) Dr. Md. Rezaul Haque expressed confidence in the bank’s ability to stabilise operations without external intervention, emphasising that control should rest with shareholding directors rather than independent directors. However, no timeline was provided for the turnaround.

SIBL’s financial troubles have deepened following asset withdrawals of over Tk 60 billion linked to the controversial S Alam Group, which has severely strained the bank’s liquidity management. Meanwhile, GIB has chosen to cooperate with the central bank’s measures to revive struggling lenders. GIB Chairman Mohammed Nurul Amin stated that the bank is open to all options including merger, recapitalisation, or liquidation highlighting that depositors’ interests remain the primary concern.

GIB currently holds a loan portfolio of Tk 140 billion, of which Tk 120 billion was borrowed by entities tied to S Alam Group. A significant portion of these loans has defaulted, with collateral covering less than 25 per cent of the exposure.

The Bangladesh Bank plans to apply its bank-resolution ordinance to five troubled banks Union Bank, First Security Islami Bank (FSIB), EXIM Bank, SIBL, and GIB. However, both EXIM Bank and SIBL have so far rejected the merger plan, while GIB has opted to move forward under the regulator’s supervision