The High Court yesterday dismissed a writ petition challenging the legality of the government’s decision to consolidate five financially troubled private Islamic banks into a single entity.
The ruling was delivered by a bench comprising Justice Fahmida Quader and Justice Md Ashif Hasan following a concise hearing. Barrister Sayed Mahsib Hossain, who represented the petitioner, confirmed the proceedings to the press.
Additional Attorney General Mohammad Arshadur Rouf appeared on behalf of Bangladesh Bank to oppose the petition.
The writ had been filed on 18 November by general investor Shahidul Islam, naming the governor of Bangladesh Bank, the finance secretary, and several other officials as respondents. The petition sought judicial directives to protect the rights of ordinary shareholders and to ensure equitable share allocation in the newly proposed Sammilito Islami Bank, which would emerge from the merger of five private banks: First Security Islami Bank, Union Bank, Global Islami Bank, Social Islami Bank, and EXIM Bank.
During the hearing, the state argued that the merger was carried out in accordance with the Bank Resolution Ordinance 2025. The government contended that the ordinance makes no provision for shareholder compensation, rendering the petition legally untenable. The petitioners, however, maintained that the merger was proceeding without adequate safeguards for shareholders, and that the central bank was moving forward despite insufficient preparations.
The government emphasised that the consolidation aimed to strengthen the financial sector by stabilising institutions that had been facing prolonged financial distress. Officials also highlighted that the unified bank would benefit from a streamlined governance structure, increased capital base, and enhanced operational efficiency.
On 1 December, former senior secretary Dr Mohammad Ayub Miah was appointed chairman of Sammilito Islami Bank. Preliminary approval for the establishment of the bank had been granted by Bangladesh Bank on 9 November following an application submitted by the Ministry of Finance.
The merger is seen as a landmark restructuring in the country’s Islamic banking sector, with the potential to restore confidence among depositors and investors while addressing longstanding liquidity and solvency issues.
Summary of Merged Banks
| Bank Name | Status Before Merger | Key Issue | Approval Date for Merger |
|---|---|---|---|
| First Security Islami Bank | Financially Distressed | Low capital adequacy | 9 November 2025 |
| Union Bank | Financially Distressed | High non-performing loans | 9 November 2025 |
| Global Islami Bank | Financially Distressed | Liquidity shortfall | 9 November 2025 |
| Social Islami Bank | Financially Distressed | Operational inefficiency | 9 November 2025 |
| EXIM Bank | Financially Distressed | Insolvency risk | 9 November 2025 |
The consolidation is expected to create a stronger, more resilient institution capable of supporting growth and stability within Bangladesh’s Islamic banking sector.