Trading of five Shariah-based banks currently under the merger process was suspended on Thursday by both stock exchanges of the country.
The suspended banks are Exim Bank, Global Islami Bank, Social Islami Bank, Union Bank and First Security Islami Bank.
Under the Bank Resolution Ordinance 2025, Bangladesh Bank declared the five institutions “non-viable” from November 5, initiating a major restructuring of the troubled banks.
The Dhaka Stock Exchange said trading of these banks will remain suspended until further notice.
Massive irregularities and fund mismanagement during the Awami League government caused an abnormal rise in defaulted loans across these banks.
Their liabilities have surpassed shareholders’ equity several times over, leaving them with acute capital shortfalls.
To stabilise the sector, the government appointed administrators to the five banks on Wednesday. They have been tasked with merging the institutions into a new, fully state-owned consolidated Islamic bank.
The five banks together hold deposits of around Tk 2 lakh crore. Depositors will be reimbursed up to Tk 2 lakh each from the central bank’s deposit insurance fund. Large institutional depositors will later receive Tk 15,000 crore worth of shares in the new bank following a Tk 20,000 crore initial equity injection by the government.
Existing shareholders, however, will not receive any compensation. On Wednesday, the final trading session before suspension, shares of the five banks changed hands between Tk 1.5 and Tk 3.
The move has rattled investor confidence across the stock market, causing a further decline in indices as the impact spreads beyond the banking sector.
