Bangladesh Bank has decided not to immediately recover the nearly Tk 34,000 crore in special liquidity support it provided to five financially distressed Islamic banks. The central bank will delay the repayment process until the merger of these institutions into a single new entity is completed, according to officials familiar with the matter.
The decision was finalized at a recent high-level policy meeting chaired by the Bangladesh Bank governor. Officials say repayment pressure at this stage could jeopardize the ongoing consolidation process.
New ‘Combined Islamic Bank’ Planned: According to central bank sources, EXIM Bank, First Security Islami Bank, Social Islami Bank, Global Islami Bank, and Union Bank will be merged to form a new entity tentatively named “Combined Islami Bank.”
Administrators have already been appointed to the troubled banks, and work is progressing on the merger framework. Bangladesh Bank is currently focusing on assessing the banks’ assets and liabilities, determining the capital structure, and completing necessary legal formalities.
Liquidity Support Used for Depositors and Operations: Data from the central bank shows that between 2022 and 2025, the five banks received around Tk 34,000 crore in assistance through refinance schemes, repo facilities, and special funds. Most of this money was used to pay back depositor claims and meet essential operational expenses. Bangladesh Bank has identified several structural weaknesses behind the crisis, including excessive influence from powerful business groups, irregular loan distribution practices, and weak internal governance.
Stability First, Repayment Later: A senior central bank official told reporters,
“Our priority now is stabilising these banks, not recovering the money. Once the merged bank becomes fully functional, we will reconcile the accounts and initiate the repayment process.”
The merger initiative is part of a broader effort to restore discipline in the Islamic banking sector, which has faced recurring liquidity and governance challenges in recent years.
