Governor Orders Swift Islamic Bank Consolidation

Bangladesh Bank Governor Mostak­ur Rahman has emphasised the urgent need to complete the consolidation of the Consolidated Islamic Bank, formed by merging five underperforming Shariah-based banks, as part of the central bank’s broader financial sector reform programme. Speaking at a meeting with the administrators of the banks on Monday, 16 March 2026, he stressed that there is no alternative to completing the integration quickly.

Meeting with Bank Administrators

The meeting, held at the Governor’s office, included senior officials responsible for overseeing the integration process. Governor Rahman instructed the administrators to accelerate the work, particularly the IT system integration, which has been a major focus of the consolidation.

During the discussions, the Governor queried the reasons behind delays in IT alignment. Officials responded that consolidating separate data systems from multiple banks is a time-consuming process, but he stressed that the project cannot be delayed further. “There is no room to step back from this initiative,” he remarked.

The Governor also noted that the government has already allocated BDT 20,000 crore in capital to the new entity. In addition, a further BDT 12,000 crore has been set aside from the deposit insurance fund to protect customer deposits. These substantial allocations underline the importance of completing the consolidation without further delay.

Ensuring Continuity and Effective Management

Earlier, on 3 March 2026, Governor Rahman met with the administrators to assure them that a Managing Director (MD) would be appointed promptly to oversee the new bank. Administrators were instructed to continue fulfilling their responsibilities in accordance with regulatory guidelines.

The Governor also emphasised the importance of strengthening loan recovery. He directed that efforts be made to revive factories established with the banks’ investments but currently out of operation, thereby protecting both public and private funds.

Banks Involved in the Consolidation

The consolidation involves the following five Shariah-based banks:

In November 2025, Bangladesh Bank formally appointed administrators for these banks to oversee operational unification, particularly focusing on IT system consolidation. Each bank has one administrator and four supporting officers, all drawn from various levels of the central bank.

Outlook for Consolidation

The Governor’s insistence on completing the consolidation reflects a wider push to strengthen the Shariah-based banking sector while ensuring financial stability. Observers note that successful integration could improve efficiency, reinforce regulatory compliance, and protect the substantial government and deposit insurance investments made in the new bank.

As the integration process continues, stakeholders are closely monitoring progress, particularly regarding IT alignment, loan recovery, and management continuity. The Governor’s directives underline that the consolidation is a non-negotiable priority within Bangladesh’s ongoing financial sector reforms.