Friday, 07 November, 2025
Bangladesh Bank has confirmed that ordinary shareholders will gain no benefit from the impending merger of five troubled Shariah-based private banks, a resolution driven largely by extensive fund embezzlement and mounting financial irregularities.
In a statement on Thursday, the central bank noted that there is currently no mechanism to safeguard the interests of general investors in the consolidation, though the government may consider some form of compensation for small shareholders.
Governor Ahsan H Mansur announced on Wednesday that all shares of Exim Bank, First Security Islami Bank, Global Islami Bank, Union Bank, and Social Islami Bank would be declared “zero” as the merger process begins. The move follows the central bank declaring the banks “ineffective,” dissolving their boards, forcing resignations of senior management, and appointing administrators to oversee the process.
At a press briefing, Mansur explained: “If we calculate assets against shares of all five banks, they have gone negative by Tk 350 to Tk 420. We are not demanding money from shareholders. According to international practice, shareholders assume responsibility. Since capital is negative, all shares will be zero.”
All five banks are listed on the stock exchange. Trading was suspended on Thursday to formally notify investors of the merger and the associated losses.
The central bank stressed that the merger would follow international best practices under the Bank Resolution Act, which outlines the rights and obligations of depositors, shareholders, and other creditors of banks undergoing resolution.
The Banking Sector Crisis Management Committee, in a meeting on 24 September, had decided that shareholders of the five banks would bear the losses resulting from the resolution process. The central bank reiterated that, at present, there is no way to protect the interests of general investors in this merger.
Analysts say the consolidation, driven by years of fund embezzlement, mismanagement, and weak regulatory oversight, marks a critical turning point in Bangladesh’s banking sector. While it may stabilise systemic risk, ordinary shareholders are facing a total wipeout, highlighting the urgent need for stricter governance, transparency, and accountability in private banking.
Comments
Bangladesh Bank has confirmed that ordinary shareholders will gain no benefit from the impending merger of five troubled Shariah-based private banks, a resolution driven largely by extensive fund embezzlement and mounting financial irregularities.
In a statement on Thursday, the central bank noted that there is currently no mechanism to safeguard the interests of general investors in the consolidation, though the government may consider some form of compensation for small shareholders.
Governor Ahsan H Mansur announced on Wednesday that all shares of Exim Bank, First Security Islami Bank, Global Islami Bank, Union Bank, and Social Islami Bank would be declared “zero” as the merger process begins. The move follows the central bank declaring the banks “ineffective,” dissolving their boards, forcing resignations of senior management, and appointing administrators to oversee the process.
At a press briefing, Mansur explained: “If we calculate assets against shares of all five banks, they have gone negative by Tk 350 to Tk 420. We are not demanding money from shareholders. According to international practice, shareholders assume responsibility. Since capital is negative, all shares will be zero.”
All five banks are listed on the stock exchange. Trading was suspended on Thursday to formally notify investors of the merger and the associated losses.
The central bank stressed that the merger would follow international best practices under the Bank Resolution Act, which outlines the rights and obligations of depositors, shareholders, and other creditors of banks undergoing resolution.
The Banking Sector Crisis Management Committee, in a meeting on 24 September, had decided that shareholders of the five banks would bear the losses resulting from the resolution process. The central bank reiterated that, at present, there is no way to protect the interests of general investors in this merger.
Analysts say the consolidation, driven by years of fund embezzlement, mismanagement, and weak regulatory oversight, marks a critical turning point in Bangladesh’s banking sector. While it may stabilise systemic risk, ordinary shareholders are facing a total wipeout, highlighting the urgent need for stricter governance, transparency, and accountability in private banking.
Comments
