BB abolishes five Islamic bank boards

Bangladesh Bank (BB) has dissolved the boards of the five liquidity-crisis-ridden Islamic banks facing mergers.

The central bank called the board of directors of the struggling unconventional banks on the day and shared the decision to dissolve their boards as part of the ongoing merger move by the regulator.

The BB high-ups congratulated the board members for their time and energy in operating the banks in this critical period of time.

Emerging from the meeting, the chairman of the just-expired board of directors of First Security Islami Bank, Abdul Mannan, told the reporters that the banking regulator dissolved the bank's board like others with floral appreciation for their responsibilities.

"From now on, we have a role in the bank," he said.

The Bangladesh Bank sources said two banks -- Union and SIBL-- have full-fledged managing directors and have also been removed, while others have managing directors (current charge).

The BB governor is set to hold a press conference in the afternoon, where he is expected to inform the media about the next course of action in detail.

According to the BB merger roadmap, the proposed bank will have a paid-up capital of Tk 350 billion, with Tk 200 billion provided by the government as equity and the remaining Tk 150 billion coming from the deposit-insurance trust fund and institutional deposits.

The combined non-performing loans (NPLs) of the five banks amount to Tk 1.47 trillion, accounting for 77 per cent of their total loan disbursements. Union Bank has the highest percentage of dud loans at 98 per cent, followed by First Security Islami Bank (96 per cent), Global Islami Bank (95 per cent), Social Islami Bank (62 per cent), and EXIM Bank (48 per cent).

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