Gazi Anowar :
The banking sector, often described as the heart of the economy, is once again in turmoil – this time due to a renewed push for mergers targeting six struggling banks.
Following the enactment of the “Bank Resolution Ordinance 2025,” Bangladesh Bank has been granted sweeping powers to restructure or dissolve any bank under its jurisdiction, including private, state-owned, and foreign commercial banks.
The latest controversy centers on a merger initiative announced by Bangladesh Bank Governor Dr. Ahsan H. Mansur.
The plan aims to consolidate six financially distressed banks-First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, EXIM Bank, and National Bank-under temporary state ownership.
Five of these banks were previously controlled by the controversial S. Alam Group, while EXIM Bank’s former chairman Nazrul Islam Majumder has also faced scrutiny.
Soon after the announcement, panic spread among depositors, particularly at branches of the named banks. Customers rushed to withdraw their savings, fearing insolvency or loss of access to their funds.
In many cases, branches struggled with liquidity, failing to meet withdrawal demands. Reports from depositors cite long queues, unmet requests, and cash shortages. Bank officials admitted to facing severe liquidity stress due to the sudden withdrawal pressure.
“This is a result of years of poor governance, massive loan defaults, and regulatory inaction,” said a senior banker on condition of anonymity.
Critics argue that the merger is not about reforming the sector but about shielding powerful business figures linked to large-scale loan fraud and irregularities.
The previous government under Sheikh Hasina had allegedly handed control of several major banks to politically connected individuals and families-such as S. Alam, Saifuzzaman Chowdhury, Nafis Sarafat, the Sikder family, and Nazrul Islam Majumder-turning the financial sector into a hub of money laundering and systemic corruption.
In one widely criticized incident, an HSC (high school) graduate was appointed as Deputy Managing Director of a leading Islamic bank, underscoring the depths of mismanagement.
“EXIM Bank is not like the rest,” said current Chairman Nazrul Islam Swapan. “We’ve recovered significantly post-crisis. Why are we being grouped with institutions riddled with scandals?” Swapan claims the bank has returned over Tk 16,925 crore to depositors and secured Tk 10,500 crore in new deposits in recent months.
He alleged that EXIM Bank’s inclusion in the merger is due solely to its past association with Majumder, who no longer holds controlling shares.
After the public uprising and change in administration, former governor Abdur Rauf Talukder-accused of failing to act against rampant corruption-was replaced by Dr. Mansur.
The governor declared that “at least 10 banks are on the brink of collapse” and initiated sweeping reforms. Over a dozen boards of directors were dissolved, prompting another wave of depositor anxiety.
To stabilize the situation, Bangladesh Bank injected liquidity exceeding Tk 22,000 crore into affected banks. However, this appears insufficient. Banks like First Security Islami Bank and National Bank still face salary payment delays and operational disruptions.
Banking analysts argue that forced mergers without strategic audits and stakeholder consensus will only erode public confidence further. “Mergers must be voluntary and well-planned,” Anis A. Khan, former MD of Mutual Trust Bank told The New Nation. “We don’t need so many banks, but consolidation must follow due diligence and involve an independent task force,” he added.
Others suggest leveraging public utility payments and government project funds to support struggling banks, as well as mobilizing international financing from IMF, World Bank, and ADB for restructuring.
Skeptics view the merger as a continuation of the former regime’s efforts to protect corrupt banking interests under the guise of reform. “Even after the downfall of Sheikh Hasina’s government, we see the same playbook being followed,” said a political economist. “Who truly benefits from this merger? The public or the looters?”
The Bangladesh Bank governor maintains that the merger is essential for systemic recovery and that shares will eventually be offloaded to private and international investors. But with public trust deteriorating and liquidity stress worsening, the move has triggered more fear than reassurance.
As July approaches-the government’s stated deadline for completing the merger-the question remains: Is this the path to a clean financial system, or just a reshuffling of power among the same vested interests?
