Hundreds of thousands of ordinary citizens are facing ruin as five banks-First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, and Exim Bank-teeter on collapse. With billions misappropriated during the AL government, depositors are now unable to access their savings. The central bank’s lifeline is drying up, turning a financial crisis into a humanitarian catastrophe.
Depositors Left in Limbo: Customers across the country are being turned away empty-handed when they attempt to withdraw their own money. Withdrawal requests are routinely denied or limited to a measly Tk5,000 - even for those seeking funds for medical care, education, or business expenses. Teachers and businessmen who repeatedly visit branches return home frustrated, empty-handed; their trust utterly eroded. The Aftermath of Massive Looting: Banks previously controlled by the powerful S Alam Group and others have suffered devastating malpractice. An estimated Tk40,000 crore in combined equity shortfall across the five banks is the result of overwhelming loan defaults, mismanagement, and outright embezzlement. Non-performing loans account for a staggering 77% of total loans. Deposit-asset gaps exceed Tk45,000 crore, and the central bank has already pumped in liquidity support exceeding Tk5,000 crore - but this barely scratches the surface. Merger: The Controversial Fix:
To prevent total collapse, Bangladesh Bank has proposed merging these weak banks under government ownership, empowered by the new Bank Resolution Ordinance 2025. The plan includes capital injections of Tk?10,000-12,000?crore over the next 2-3 years, with seized shares offered to strategic investors.
However, not all banks are on board. Exim Bank has raised objections - both on principle and practical grounds - citing its relatively healthier financial status compared to the others.
Central Bank’s Lifeline - Now Draining Out: Previously, six banks had rebounded through deposit mobilization and intervention. But the remaining five continue to struggle, exhausting liquidity support programs. Bangladesh Bank has halted special monetary infusions to curb inflation. Many branches can now only withdraw limited funds, heightening desperation.
World Bank analysts caution that forced mergers without asset-quality assessments risk shaking investor confidence and hurting robust banks. A strategic, transparent plan is needed.
Voices from the Field: Union Bank, Dhaka: Branches resemble ghost towns. “Bangladesh Bank has stopped assistance before the merger,” says a stunned manager. “We can’t return any money-even Tk?5,000 salaries to staff aren’t getting paid.”
Global Islami Bank, Motijheel: Staff confess overwhelming pressure. “Customer outbursts and frustration are unbearable,” one says as tears well up. Depositors nationwide: Chronicling endless attempts to retrieve funds. A schoolteacher made 18 trips to withdraw Tk?127,000, but got nothing. Others wait days in queues across Chattogram, Cox’s Bazar, and beyond.
Policy Response & the Road Ahead: Central Bank & Government Measures: AUDIT & MERGE: Bangladesh Bank has already hired EY and KPMG to audit the banks. A merger timeline has tentatively been set to conclude by December 2025, pending compliance. LIQUIDITY SUPPORT: Despite massive bailouts, banks continue hemorrhaging. Central Bank support may be inadequate without structural reforms. Expert Opinions: Zahid Hussain (ex-World Bank): Calls for clear resolution plans for weak banks before considering mergers. World Bank: Warns that rushed mergers may destabilize the sector, urging comprehensive evaluation of weak banks. Reddit Perspectives: Citizens propose consolidating 61 weak banks into a more manageable group of 8-10, enabling economies of scale and reducing vulnerability to fraud and deposit runs.
With savings inaccessible, families can’t pay for medicines, school fees, or daily needs. Shopkeepers, teachers, entrepreneurs - all are stuck in limbo, often taking loans to survive. Confidence in the banking system is collapsing, replaced by fear and volatility.
A Sector Reeling for Redemption: The AL-era looting has inflicted a multi-layered crisis: financial instability, regulatory breakdown, and a humanitarian emergency. While the central bank’s intervention and merger plans aim to stabilize, depositors remain painfully downtrodden.
Recovery hinges on: Swift, transparent merger execution with asset clarity. Accountability and criminal prosecution where corruption occurred. Rebuilding depositor trust through real access to funds. Long-term consolidation of weak banks into resilient institutions.
