Government to take charge of six troubled banks through merger, says Governor Mansur

Bangladesh Bank Governor Ahsan H Mansur has announced that six financially distressed banks will be consolidated and brought under state ownership as part of a sweeping reform to stabilise the banking sector.

According to a report aired on Channel 24 on Monday night, the consolidation process will be completed by July this year, after which foreign investors will be invited to take over the merged bank.

The banks in question are Social Islami Bank Limited (SIBL), First Security Islami Bank, Global Islami Bank, Union Bank, Exim Bank, and National Bank.

Among them, the boards of four banks were directly controlled by controversial Chattogram-based businessman Saiful Alam Masud, also known as S Alam.

Toward the end of the ousted Awami League government's term, S Alam also gained indirect control of the National Bank board through beneficiaries.

EXIM Bank, meanwhile, was under the influence of another politically powerful businessman Nazrul Islam Mazumder during Sheikh Hasina’s tenure.

The report said an asset review of these banks has already been conducted as part of the government’s preparation to assume control.

Speaking to Channel 24, the governor said, “By July, these banks will be brought under state ownership and recapitalised. After that, we will look for foreign investors.

“This is reassuring news, because the banks are being nationalised,” he added. “The government will temporarily take charge and provide capital support. Bangladesh Bank is already supplying liquidity.

“Then we’ll transfer shares to international strategic investors once the restructuring is done.

“During the restructuring period, we [Bangladesh Bank] will retain partial ownership. It’s a temporary arrangement under which a new bank will be formed, and later transferred to new investors.”

In 2024, Padma Bank and EXIM Bank had board-level approval to merge. A memorandum of understanding was signed to that effect.

Later, Bangladesh Bank gave the green light for National Bank (NBL) to merge with United Commercial Bank (UCB), but the plan was shelved after National Bank objected to the merger.

After taking charge, the interim government introduced the Bank Resolution Ordinance, 2025 as part of banking sector reforms.

The ordinance allows the government and Bangladesh Bank to temporarily take over any scheduled bank or financial institution facing insolvency or at risk of collapse, “in the interest of stabilising and improving their condition”.

It also empowers authorities to take any steps to restructure failing banks.

Following the ordinance, the governor confirmed the decision to bring six banks under government control.

He said, “We will proceed in phases. If we succeed with the first one, we will move to the next. We will learn from any mistakes along the way. This is not a two- or three-month process.

“The first three months after resolution will be particularly challenging.”

On attracting foreign investment following the merger, Mansur said: “Whoever takes over as the new strategic investor should be capable of running the bank efficiently.

“We want to see its capital base grow, liquidity increase, and every depositor fully protected. No customer should incur any loss,” he added.