Capital flight forces merger of 5 Shariah banks

He made the remarks while speaking at the opening session of the Bangladesh Islamic Finance Summit 2025, held at a city hotel.

The three-day summit aims to position Bangladesh as a key Islamic finance hub in South Asia.

“Much of the capital from the five Shariah-based banks has been taken out of the country. Unfortunately, even the most dynamic Islamic bank in the country was hollowed out,” the governor said.

The five banks currently undergoing the merger process are EXIM Bank, First Security Islami Bank, Global Islami Bank, Union Bank, and Social Islami Bank.

Bangladesh Bank dissolved the boards of all five banks and appointed administrators on November 5, initiating the formation of a new entity named Sammilito Islami Bank (Combined Islamic Bank).

Dr Mansur emphasised that transparency is essential to revitalising and strengthening the banking sector.

He urged active participation from all stakeholders, including investors, depositors and employees, to ensure the success of the consolidation. If strong governance can be maintained during the merger process, the initiative will ultimately benefit the country’s economy, he added.

City Bank Managing Director and CEO Mashrur Arefin attended the event as the special guest. Among others, M Kabir Hassan, professor of finance at the University of New Orleans and Dr Eskandar Shah Mohd Rashid, CEO of ISRA, also spoke at the opening ceremony.

The summit brought together regulators, Shariah scholars, Islamic banking professionals, and high-level delegates from countries including Bahrain, Pakistan, Malaysia, and the United States.

Discussions will focus on strengthening governance, expanding financial inclusion, and integrating AAOIFI’s global Shariah, governance and accounting standards into Bangladesh’s Islamic finance framework, reports UNB.