Trading of shares for five Islamic banks has been suspended on the Dhaka Stock Exchange, effective November 6, 2025. This decisive action follows a formal declaration from Bangladesh Bank that the institutions are non-viable, paving the way for a large-scale merger intended to stabilize the financial sector.
The banks involved in the suspension and subsequent merger are First Security Islami Bank, Union Bank, Global Islami Bank, Social Islami Bank, and EXIM Bank. The central bank has dissolved their boards and appointed administrators to oversee operations during the transition.
Key Takeaways
- Share trading for five Islamic banks was suspended indefinitely starting November 6, 2025.
- Bangladesh Bank has declared the banks non-viable and dissolved their boards.
- Depositors are assured their money is safe, with small depositors able to withdraw funds within a month.
- Shareholders are expected to face a total loss as the value of their holdings is effectively zero.
- The merger will create the largest Islamic bank in the country with assets of approximately Tk 2.20 lakh crore.
Regulators Step In to Manage Transition
In a coordinated move, both Bangladesh Bank and the Bangladesh Securities and Exchange Commission (BSEC) took action to manage the fallout from the banks' financial troubles. On November 5, the central bank formally sent letters to the five institutions, invoking the Bank Companies Act to declare them non-viable.
Immediately following this declaration, the BSEC directed the stock exchange to suspend all trading of the banks' shares. This measure is intended to prevent further market instability and protect investors from trading in securities whose value is now uncertain.
To ensure continued operations and oversee the merger process, Bangladesh Bank has appointed five of its executive directors as administrators for the banks. Sala Uddin will manage Social Islami Bank, Mohammad Abdul Hashem will oversee Union Bank, and Mohammad Badiuzzaman Dider has been assigned to First Security Islami Bank. Md Muksuduzzaman and Md Sawkatul Alam will take charge of Global Islami Bank and EXIM Bank, respectively.
A Two-Year Plan
The full merger is a complex process expected to take between one and two years to complete. During this period, the appointed administrators will conduct a thorough review of each bank's assets and liabilities to facilitate a smooth consolidation.
Impact on Depositors and Investors
Central bank officials have moved quickly to reassure the public, particularly the millions of customers with funds in these banks. Bangladesh Bank Governor Ahsan H. Mansur emphasized that depositors' money is secure.
"The new bank [formed by merging the five institutions] will be stronger than any other bank. Depositors have no reason to worry; their money will be safe," Governor Mansur stated.
He further clarified the process for withdrawals. Small depositors, defined as those with up to Tk 2 lakh, will be able to access their funds within a month. Those with larger deposits will receive their money back in phases as the merger progresses. According to the governor, the banks hold approximately 7.5 million deposit accounts, all of which will be protected.
Shareholders Face Significant Losses
While depositors are protected, the outlook for shareholders is grim. Governor Mansur confirmed that under the Bank Resolution Ordinance, the value of shares held by both sponsor directors and ordinary retail investors will effectively be reduced to zero.
He explained the financial reality behind this decision, noting that the net asset value (NAV) of some shares had fallen to severely negative figures, such as negative Tk 350 to Tk 420 for a share with a face value of Tk 10. "It means the share has no real value – effectively, it has become zero," he said.
What About Bondholders?
Investors who hold over Tk 4,000 crore in bonds issued by the five banks are in a better position. The central bank has indicated that these bondholders are likely to recover their investments. A gazette notification is expected soon, which will outline the specific repayment process for these securities.
Creating a Financial Powerhouse
The ultimate goal of this regulatory intervention is to consolidate the five troubled institutions into a single, robust entity. This new bank is set to become the largest Islamic bank in Bangladesh.
The merged institution is projected to have combined assets of roughly Tk 2.20 lakh crore and a planned paid-up capital of Tk 35,000 crore, which would be the highest in the nation's banking history. This scale is intended to create a more stable and resilient financial institution capable of serving the market effectively.
Operational Continuity and Staffing
Governor Mansur stressed that day-to-day banking operations will continue without interruption. "Like the banks are open today, they will remain open tomorrow. Remittances, payments, and clearing will continue as before," he assured.
Regarding the workforce, there are no immediate plans for layoffs. Existing staff will continue to manage operations during the initial phases of the merger. Any potential workforce reorganization will be considered at a later stage of the consolidation process.
The central bank also confirmed that all depositors will receive a market-based profit rate on their funds, which will be determined once the new bank begins its formal operations.
