Muktadesh Desk: The central bank has dissolved the boards of five private banks that are in the process of merging. Bangladesh Bank announced this decision on Wednesday (November 5).
Earlier, on October 9, the Advisory Council of the interim government approved the proposal to merge five Sharia-based private banks in crisis – First Security Islami Bank, Global Islami Bank, Union Bank, Exim Bank and Social Islami Bank.
It was decided to form a new Sharia-based commercial bank by merging these banks, which were in trouble one after the other. The two names proposed for the new bank are – ‘United Islamic Bank’ and ‘Sammilit Islamic Bank’. It was informed that the bank will be run on a professional and commercial basis.
The meeting of the Advisory Council held at the office of the Chief Advisor in Tejgaon on October 9 was presided over by Chief Advisor Professor Muhammad Yunus. At a press conference organized at the Foreign Service Academy after the meeting, the Chief Advisor’s Press Secretary Shafiqul Alam said that no officer or employee will lose their job and no depositor will lose their deposit in the merger process.
The authorized capital of the new bank has been set at Tk 40,000 crore, and the paid-up capital will be Tk 35,000 crore. The new bank will take over all the assets and liabilities of the five banks. The government will provide Tk 20,000 crore of the paid-up capital – out of which Tk 10,000 crore will be raised in cash and the remaining Tk 10,000 crore will be raised through the issue of Sukuk bonds.
In addition, the deposits of institutional depositors worth Tk 15,000 crore will be converted into shares through the bail-in process. Later, these shares will be returned as per the resolution plan. Bail-in is a process through which a part of the liabilities or debt of an institution is canceled and converted into shares.
Initially, the new bank will be state-owned. Later, its ownership will be transferred to the private sector in stages.